Capital One sued by CFPB for allegedly cheating customers out of $2 billion
The Consumer Financial Protection Bureau (CFPB) is suing Capital One, alleging the bank illegally misled customers by not notifying them of account options that paid higher interest rates.
The federal government's consumer watchdog claims Capital One's practices meant millions of customers missed out on a collective $2 billion they could have made in interest payments.
In a complaint filed Tuesday, the CFPB accused Capital One of promising depositors that their 360 Savings account provided one of the nation's "top," "best" and "highest" interest rates but froze their rate at just 0.30% even as deposit rates rose nationwide.
The CFPB also said Capital One kept 360 Savings depositors in the dark when, in 2019, it launched the 360 Performance Savings account, which was identical except for carrying a substantially higher interest rate that reached 4.35% in January 2024.
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Capital One allegedly told branch employees not to proactively tell depositors they could switch accounts or send depositors to the bank's account conversion unit unless they asked whether conversions were allowed.
"Banks should not be baiting people with promises they can't live up to," CFPB Director Rohit Chopra said in a statement.
The CFPB said Capital One stopped offering 360 Savings to new customers when it introduced 360 Performance Savings, which now yields 3.8% annually, according to the bank's website.
Tuesday's lawsuit seeks civil fines, restitution and other remedies for violations of the Consumer Financial Protection Act of 2010 and the Truth in Savings Act.
"We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration," Capital One said in a statement. "We strongly disagree with their claims and will vigorously defend ourselves in court."
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The McLean, Virginia-based bank added that it marketed the 360 Performance Savings account widely, including on national television, "with the simplest and most transparent terms in the industry" and that its 360 accounts all offer great rates.
Reuters contributed to this report.