Allegations of Unlawful Practices
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the bank of “cheating millions of consumers” by freezing interest rates on its “360 Savings” accounts and failing to notify customers of higher-yield alternatives. The alleged practices cost consumers more than $2 billion in lost interest payments.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB Director Rohit Chopra. “Banks should not be baiting people with promises they can’t live up to.”
The Disputed Practices
The lawsuit alleges that Capital One:
- Froze interest rates on its “360 Savings” accounts at 0.30% between 2019 and mid-2024, even as nationwide interest rates rose.
- Launched a higher-yield “360 Performance Savings” account, offering rates that increased from 0.40% in 2022 to 4.35% in January 2024, without adequately informing “360 Savings” accountholders.
- Marketed the “360 Savings” account with terms like “top,” “best,” and “highest”, misleading customers about the competitiveness of its rates.
The CFPB claims that Capital One obscured the existence of the higher-yield account to retain customers in lower-yielding products, depriving them of billions in potential earnings.
Capital One’s Response
Capital One has strongly denied the allegations.
“We are 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 said. “We strongly disagree with their claims and will vigorously defend ourselves in court.”
The bank added that the “360 Performance Savings” account was widely marketed, including via national television campaigns, with what it described as “the simplest and most transparent terms in the industry.”
The CFPB’s Demands
The CFPB seeks:
- An injunction to stop what it deems unlawful practices by Capital One.
- Redress for consumers harmed by the alleged actions.
- The imposition of civil money penalties on the bank.
Key Details
The CFPB highlights that:
- The interest rate on the original “360 Savings” account remained at 0.30% even as market rates surged.
- The newer “360 Performance Savings” account was designed to attract customers with higher interest rates, but the bank allegedly failed to notify existing accountholders of this better option.
Consumer Protection Implications
This lawsuit underscores the CFPB’s ongoing efforts to hold financial institutions accountable for alleged deceptive practices and ensure consumers benefit from competitive market rates.
