On February 20, 2024, Capital One is headquartered in McLean, Virginia.
Brendan Smirovsky | AFP | Getty Images
Consumer Financial Protection Bureau declare it is suing on tuesday capital one Misled consumers about their savings account interest rates and “bilked” them out of more than $2 billion in interest.
Capital One defrauded holders of its 360 Savings accounts by confusing them with its newer, higher-yielding savings account option, the 360 Performance Savings account, the agency said in a statement. The bank allegedly failed to inform 360 Savings account holders of the new option and marketed the two products in a similar manner, leading customers to believe they were the same.
However, the interest rates for the two options are significantly different, according to the CFPB. Capital One will increase the 360 Performance Savings rate from 0.4% in April 2022 to 4.35% in January 2024, while lowering and freezing the 360 Savings rate at 0.3% from late 2019 to mid-2024, the agency said.
The CFPB said the 360 Savings Account was promoted as a high-interest savings account despite the relatively low interest rate. The bureau said Capital One aimed to keep 360 Savings users in the dark about higher-yielding options by replacing all references to the account on its website with the similarly named 360 Performance Savings option. Accounts were excluded from marketing campaigns promoting higher yields and employees were prohibited from informing account holders about the 360 Performance Savings option.
“The CFPB is suing Capital One, alleging it defrauded people of billions of dollars in savings accounts,” CFPB Director Rohit Chopra said in a press release. “Banks should not lure people with promises they can’t deliver.”
Capital One denied the allegations in a statement and said it was transparent in its marketing of the 360 Performance Savings account.
“We are deeply disappointed that the CFPB is continuing its recent pattern of filing last-minute lawsuits before changes in administration. We strongly disagree with their assertions and will vigorously defend ourselves in court,” the company said in a statement.
The bank added that 360 Performance Savings products are “widely marketed, including on national television, on the simplest and most transparent terms in the industry”.
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