FILE PHOTO: Signage is seen outside a Capital One Bank in Manhattan, New York, USA, November 12, 2021.
Andrew Kelly | Reuters
The Consumer Financial Protection Bureau announced Tuesday that it filed suit Capital One for misleading consumers about the interest rates on their savings accounts and “cheating” out of more than $2 billion in interest.
The agency said in a statement that Capital One misled holders of its “360 Savings” account by merging it with its newer and higher-yielding savings account option, the “360 Performance Savings” account. The bank allegedly failed to inform 360 Savings account holders of the newer option and marketed the two products similarly to mislead customers into believing they were the same.
However, according to the CFPB, the interest rates of the two options were significantly different. Capital One increased the 360 Performance Savings rate from 0.4% in April 2022 to 4.35% in January 2024, while it reduced the 360 Performance Savings rate between late 2019 and mid-2024 and then froze it at 0 .3%, the agency said.
Despite the relatively low interest rate, the CFPB alleged, the 360 Savings Account was advertised as a high-interest savings account. The agency said Capital One aimed to keep 360 Savings users in the dark about the higher-yield option by replacing all references to the account with the similarly named 360 Performance Savings option on its website, where account holders were excluded from marketing campaigns advertising the higher return option. account and prohibiting employees from notifying account holders of the 360 Performance Savings option.
“The CFPB is charging Capital One with defrauding families of billions of dollars in their savings accounts,” CFPB Director Rohit Chopra said in a news release. “Banks should not bother people with promises they cannot keep.”
In a statement, Capital One denied the allegations and said it marketed its 360 Performance Savings account transparently.
“We are deeply disappointed to see the CFPB continuing its recent pattern of filing lawsuits prior to a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court,” the company said in a statement.
The bank added that the 360 Performance Savings product was “widely marketed, including on national television, with the simplest and most transparent terms in the industry.”