The Consumer Financial Protection Bureau (CFPB) announced on Tuesday that it is suing Capital One for allegedly misleading consumers about the interest rates on their savings accounts and “cheating” them out of more than $2 billion in earned interest.
In a statement, the CFPB accused Capital One of deceiving customers who held its “360 Savings” accounts by blurring the distinction between this product and its newer, higher-yield “360 Performance Savings” account.
According to the bureau, the bank failed to inform 360 Savings account holders about the existence of the newer option and marketed both accounts in a way that implied they were identical.
The agency noted a significant disparity in the interest rates of the two accounts. Between April 2022 and January 2024, Capital One increased the 360 Performance Savings account interest rate from 0.4% to 4.35%.
Meanwhile, the interest rate for the 360 Savings account was reduced and eventually frozen at 0.3% from late 2019 through mid-2024, according to the CFPB.
Despite offering a comparatively low interest rate, the CFPB alleged that the 360 Savings account was promoted as a high-interest savings product.
The agency further claimed that Capital One intentionally kept 360 Savings customers unaware of the higher-yield 360 Performance Savings account.
Allegedly, the bank removed references to the 360 Savings account from its website, excluded those account holders from marketing campaigns for the 360 Performance Savings account, and prohibited employees from informing customers about the higher-yield option.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB Director Rohit Chopra in a press release. “Banks should not be baiting people with promises they can’t live up to.”
Capital One, however, denied the allegations in its own statement, asserting that it marketed the 360 Performance Savings account transparently.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court,” the company stated.
The bank also highlighted that the 360 Performance Savings product was “marketed widely, including on national television, with the simplest and most transparent terms in the industry.”