Axos Bank class action alleges company misleadingly advertised high-yield savings accounts

Axos Bank accounts class action lawsuit overview: 

• Who: Gianni Sutaniman filed a class action lawsuit against Axos Bank doing business as UFB Direct.
• Why: Sutaniman claims Axos Bank division UFB Direct misleadingly markets ‘high-yield savings accounts’ that he argues have their interest rates capped after the bank begins marketing a newer version of the accounts. 
• Where: The class action lawsuit was filed in California federal court. 

Axos Bank division UFB Direct lured consumers into opening new savings accounts described as being its “highest-yielding savings account” with a “variable interest rate,” that the company would then cap the interest rates on, a new class action lawsuit alleges. 

Plaintiff Gianni Sutaniman claims the Axos Bank division, after capping the interest rates on the accounts, would begin marketing its savings accounts under a similar name but with a higher interest rate and annual percentage yield. 

The plaintiff argues UFB Direct would then advertise its new savings accounts as its “highest yielding” variable rate savings accounts, while failing to notify its current account holders of the change or that their accounts would no longer receive its highest available interest rates. 

“Unbeknownst to the tens of thousands of consumers nationwide lured into opening new accounts with UFB via the Bank’s ‘increased marketing efforts,’ they were — or soon would become — the victims of a classic bait and switch,” the Axos Bank class action states. 

The plaintiff wants to represent a nationwide class of consumers with a UFB Direct high-yield savings account since the Axos Bank division created the high-yield savings account. 

UFB allegedly caps rates on ‘legacy’ accounts marketed as ‘highest-yield savings’ accounts

The plaintiff claims UFB Direct, when renaming its savings accounts, would rewrite their account agreements to characterize previous “highest-yield savings” accounts as a “legacy” account. 

“Contemporaneously, and again without any notice to existing savings account holdings, UFB would cap the interest rates on these ‘legacy’ accounts at a rate lower than its newly-minted highest-yielding savings account,” the Axos Bank class action states. 

The plaintiff argues consumers who had funds in the so-called legacy accounts were ultimately tricked into leaving their funds to “languish” in accounts with a “dramatically lower APY than they anticipated” and that were “far below” rates offered by other banks with online-only, high-yield savings account programs. 

UFB Direct perpetrated the alleged bait and scheme at least ten times over the course of 2022 and 2023, according to the Axos Bank class action. 

The plaintiff claims Axos Bank is guilty of breach of contract, fraud and breach of the implied covenant of good faith and fear dealing, and of violating California’s False Advertising Law.

The plaintiff is demanding a jury trial and requesting declaratory and injunctive relief along with an award of damages under common law and/or by statute, including punitive damages for himself and all class members. 

A separate class action lawsuit was filed against Axos Bank in September 2021 over claims the bank charged multiple insufficient fund fees on the same transaction and charged overdraft fees on accounts that were not actually overdrawn.

Have you held a UFB Direct high-yield savings account? Let us know in the comments.

The plaintiff is represented by Cory A. Baskin of Witkow Baskin and Joshua L. Seifert of Joshua L. Seifert PLLC. 

The Axos Bank accounts class action lawsuit is Sutaniman, et al. v. Axos Bank d/b/a UFB Direct, Case No. 3:23-cv-02266, in the U.S. District Court for the Southern District of California.

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