Capital One

Capital One Sued for Allegedly Cheating Customers Out of $2 Billion in Interest Payments

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the bank of depriving millions of consumers of more than $2 billion in interest payments on its high-interest savings accounts.

According to the CFPB, Capital One froze the interest rates on its “360 Savings” accounts at low levels, despite rising interest rates across the country. The bank allegedly introduced a new savings account, the “360 Performance Savings,” with better rates, but failed to inform “360 Savings” account holders, causing them to miss out on higher returns.

CFPB Director Rohit Chopra criticized the bank for its actions, saying, “Banks should not be baiting people with promises they can’t live up to.” The lawsuit claims Capital One’s decision to freeze rates at 0.30% between 2019 and mid-2024, despite a nationwide increase in rates, was a deliberate attempt to keep customers in lower-yielding accounts, ultimately costing them billions in lost interest.

In response, Capital One expressed disappointment over the lawsuit and emphasized that the new account was marketed widely, including through national television ads. The bank also stated that it strongly disagrees with the CFPB’s claims and would vigorously defend itself in court.

The lawsuit centers around the bank’s marketing of the “360 Savings” account, which the CFPB argues falsely promised some of the best rates in the industry. In contrast, the “360 Performance Savings” account offered significantly higher rates, increasing from 0.40% in 2022 to 4.35% by January 2024.

The CFPB’s lawsuit aims to stop the alleged unlawful practices, compensate affected consumers, and impose civil penalties on the bank.

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