The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Capital One, accusing the bank of misleading customers about its 360 Savings accounts.
At a Glance
- The CFPB accuses Capital One of deceptive marketing of its 360 Savings account.
- Allegedly, customers lost over $2 billion due to misleading interest rates.
- Capital One marketed 360 Savings as a high-interest account but later capped rates.
- The CFPB seeks civil penalties and relief for affected consumers.
Allegations Against Capital One
The CFPB has initiated litigation against Capital One, alleging that the bank engaged in deceiving its customers with its marketing of the 360 Savings savings account. The CFPB contends that Capital One falsely promoted this product as a high-interest savings option but later capped interest rates without proper notification. As a result, millions of customers reportedly missed out on substantial earnings, totaling over $2 billion in lost interest.
The lawsuit argues that Capital One failed to keep pace with national interest rate increases, instead promoting a separate product, the 360 Performance Savings account, which offered better rates. The CFPB claims that Capital One intentionally did not inform 360 Savings account holders about this new product, resulting in billions in foregone interest payments by consumers.
Capital One’s Defense
Capital One disputes the CFPB’s allegations and has pledged to “vigorously defend” itself in court. The bank asserts that its customers have benefited from competitive rates offered by its 360 banking products. Capital One also criticized the timing of the lawsuit, expressing disappointment at what they describe as a pattern of filing lawsuits ahead of a transitioning administration.
“Deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration…” – A Capital One spokesperson
Despite these defenses, the CFPB remains steadfast in its claims. The bureau argues that the funds held in 360 Savings accounts were capped at 0.30%, significantly below the national average from December 2020 to August 2024. Meanwhile, rates for 360 Performance Savings accounts increased substantially during the same period.
CFPB’s Demands
The CFPB is pursuing civil penalties and seeking financial compensation for all affected consumers. This legal motion comes as part of the bureau’s mission to protect American consumers from misleading financial practices. Analysts suggest that though the lawsuit was filed in the waning days of the current administration, it is likely to continue amid the political transition to ensure consumer protection is prioritized.
In conclusion, as the lawsuit unfolds, both Capital One and the CFPB await a resolution. Consumers, on the other hand, will watch closely as the justice system navigates this battle over financial integrity, eager to see if protections against deceptive practices are reinforced.
Sources
1. Capital One sued by US watchdog alleging bank cheated customers out of $2 billion
2. Capital One sued for ‘cheating’ customers out of billions in interest on savings accounts
