The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the bank of misleading customers about their savings account options and costing them over $2 billion in interest.
The lawsuit centers on Capital One’s “360 Savings” account, which the CFPB claims was falsely advertised as a high-yield option.
The agency alleges the bank failed to inform account holders about its newer “360 Performance Savings” product, which offered significantly higher interest rates.
While the 360 Performance Savings rate climbed from 0.4% in April 2022 to 4.35% by January 2024, the 360 Savings rate stagnated at 0.3% between late 2019 and mid-2024.
The CFPB asserts that Capital One’s marketing blurred the distinction between the two accounts.
The bank allegedly replaced mentions of the 360 Savings account with its higher-yield counterpart on its website, excluded account holders from promotions for the 360 Performance Savings option, and instructed employees not to inform customers about the better rates.
CFPB Director Rohit Chopra criticized Capital One’s practices, stating, “Banks should not be baiting people with promises they can’t live up to.”
In response, Capital One denied the allegations, emphasizing that it transparently promoted the 360 Performance Savings account through various channels, including national television.
“We strongly disagree with their claims and will vigorously defend ourselves in court,” the company said, adding that the product featured “the simplest and most transparent terms in the industry.”
This legal battle underscores the business challenges banks face in maintaining transparency while marketing financial products. For customers, it serves as a reminder to stay informed and scrutinize their financial options.
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