CFPB Sues Capital One Over Alleged $2 Billion In Lost Interest For Consumers

Capital One Financial Corporation COF is facing a lawsuit filed by the Consumer Financial Protection Bureau (CFPB), which accuses the bank of cheating millions of consumers out of more than $2 billion in lost interest.

In a statement, the CFPB claims that Capital One falsely advertised its “360 Savings” account as offering one of the best interest rates in the nation, only to freeze the rate at a low level while rates increased across the country.

Between late 2019 and mid-2024, Capital One kept the interest rate on its 360 Savings account at just 0.30%, even as market rates soared. Simultaneously, Capital One introduced the “360 Performance Savings” account, which paid a substantially higher rate—at one point, more than 14 times the rate of 360 Savings.

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Despite this, Capital One allegedly failed to notify existing 360 Savings accountholders about the new account and worked to obscure its existence.

The CFPB alleges Capital One deliberately misled customers by hiding the more lucrative 360 Performance Savings account. The bank named and marketed the two accounts similarly, eliminated mentions of 360 Savings on its website, and did not inform existing customers about the new product.

The bank even prohibited employees from informing 360 Savings accountholders about the higher-paying account, thus keeping them locked into the lower-yielding product.

Per CFBP, Capital One marketed its 360 Savings as a “high-interest” account with one of the nation’s best rates, only to mislead customers by freezing the rate at 0.30%. At the same time, it marketed the 360 Performance Savings account at much higher rates, ranging from 0.40% in April 2022 to 4.35% in January 2024.

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The CFPB claims that Capital One’s actions amounted to a violation of the Truth in Savings Act by misrepresenting the interest rates for 360 Savings and unfairly keeping customers in the dark about the more beneficial 360 Performance Savings account.

The lawsuit seeks to halt the alleged unlawful conduct, provide restitution to affected customers, and impose civil penalties on the bank.

CFPB Director Rohit Chopra criticized Capital One for “baiting people with promises they can’t live up to,” and emphasized the harm caused by these deceptive practices.

“The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund,” stated Chopra.

According to Benzinga Pro, COF stock has gained over 43% in the past year.

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