The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, alleging that the bank "cheated" customers by withholding over $2 billion in interest. The CFPB claims that Capital One used deceptive marketing tactics to obscure the differences in interest rates between its "360 Savings" account and the "360 Performance Savings" account. This legal action comes amid changes in administration, with Capital One criticizing the timing of the lawsuit as an "eleventh hour" move.
The CFPB alleges that Capital One replaced mentions of the "360 Savings" account with the "360 Performance Savings" account on its website, leading to confusion among customers. Additionally, the agency claims that Capital One excluded "360 Savings" users from marketing campaigns for the higher-yield "360 Performance Savings" account, which offered an interest rate of 4.35% as of January 2024. In contrast, the "360 Savings" account maintained a significantly lower interest rate of 0.3% from late 2019 to mid-2024.
According to the CFPB, Capital One prohibited employees from informing "360 Savings" account holders about the newer and more advantageous "360 Performance Savings" option. This allegedly misled customers by marketing both products similarly, despite substantial differences in interest rates. The CFPB contends that this strategy deceived account holders into believing that both savings options were identical.
Capital One has denied these allegations, asserting that it has marketed its "360 Performance Savings" account transparently. The bank stated that it has been "marketed widely, including on national television, with the simplest and most transparent terms in the industry." The company expressed disappointment at the lawsuit's timing and vowed to vigorously defend itself in court.
"We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court," said Capital One.
"Banks should not be baiting people with promises they can't live up to," remarked CFPB Director Rohit Chopra.
The CFPB argues that Capital One's actions violated consumers' trust by conflating the two accounts, thus depriving them of significant interest income. The lawsuit highlights a period during which the interest rate for the "360 Performance Savings" account increased dramatically from 0.4% in April 2022 to 4.35% in January 2024. Meanwhile, many "360 Savings" account holders remained unaware of this beneficial option.