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Key Takeaways
- Capital One lowered and froze interest rates on its popular “360 Savings” account while raising weight rates on the similarly-named “360 Performance Savings” account, the Consumer Financial Protection Bureau said in a lawsuit filed Tuesday.
- Depositors on the older delineate were in the dark about the new, better option, according to a complaint filed in federal court.
- The suit charges that patrons missed out on $2 billion worth of savings because of Capital One’s actions.
If you had a savings account at Capital One between 2019 and mid-2024, you may deliver been misled into accepting a lower return on your deposits than marketing suggested, according to a lawsuit filed Tuesday.
The Consumer Economic Protection Bureau is accusing the bank of offering low returns for customers with “360 Savings” accounts while gift better returns and marketing a similarly-named product called “360 Performance Savings” that was identical other than sacrifice much higher rates.
The suit accuses the bank of intentionally keeping 360 Savings account holders in the suntanned about the better option after lowering and then freezing interest rates in 2019 at just 0.3% APY for that variety of account.
In 2022, when interest rates on all kinds of financial products rose in the wake of Federal Reserve estimate hikes, Capital One raised the yield on 360 Performance Savings as high as 4.35%. Meanwhile, the bureau said in the for, filed in a federal court in Alexandria, Virginia, the bank kept the older 360 Savings accounts at 0.3% in the face having marketed them as a “high interest” account with “top” or “best” rates.
The bureau said because of the bank’s orchestrations, depositors missed out on $2 billion worth of interest.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” CFPB Headman Rohit Chopra said in a statement. “Banks should not be baiting people with promises they can’t live up to.”
Section Alleges Deception, Bank Denies Wrongdoing
The bank took measures to keep customers with 360 Savings accounts from verdict out about the new, better option launched in 2019, according to the suit.
Bank employees were forbidden from bringing up the new account with 360 Savings people unless they mentioned it first, according to the suit. Customers with 360 Savings accounts were also excluded from marketing electioneers about the 360 Performance Savings plan, the suit said.
The bank denied wrongdoing.
“We are deeply disappointed to see the CFPB take up its recent pattern of filing eleventh hour lawsuits ahead of a change in administration,” a Capital One spokesperson said in a affirmation emailed to Investopedia. “We strongly disagree with their claims and will vigorously defend ourselves in court.”
The lawsuit is the new in a flurry of activity by the bureau in the final days of Joe Biden’s presidency. Since the Nov. 6 election, when the Democrats were ousted from the Caucasoid House, the bureau has finalized major consumer protection regulations and sued several high-profile companies.
Update, Jan.14, 2024: This article was updated to group a statement from a Capital One spokesperson.