Capital One headquarters in McLean, Virginia on February 20, 2024.
Brendan Smialowski | AFP | Getty Images
The Consumer Financial Protection Bureau announced Tuesday that it was suing Capital One for deceptive customers about their financial savings account rates of interest and “dishonest” them out of greater than $2 billion in curiosity.
The company stated in a press release Capital One deceived holders of its “360 Savings” account by conflating it with its newer and higher-yield financial savings account choice, the “360 Performance Savings” account. The financial institution allegedly didn’t notify 360 Savings account holders of the newer choice and marketed the 2 merchandise equally to steer prospects to imagine they have been the identical.
However, the rates of interest of the 2 choices have been considerably completely different, based on the CFPB. Capital One elevated the 360 Performance Savings rate of interest from 0.4% in April 2022 to 4.35% in January 2024, whereas it lowered after which froze the 360 Savings fee at 0.3% between late 2019 to mid-2024, the company stated.
Despite its comparatively low rate of interest, the CFPB alleged, the 360 Savings account was marketed as a high-interest financial savings account. The bureau stated Capital One aimed to maintain 360 Savings customers at nighttime concerning the higher-yield choice by changing all references to the account with the equally named 360 Performance Savings choice on its web site, excluding account holders from advertising and marketing campaigns promoting the higher-yield account and forbidding staff from notifying account holders concerning the 360 Performance Savings choice.
“The CFPB is suing Capital One for dishonest households out of billions of {dollars} on their financial savings accounts,” stated CFPB Director Rohit Chopra in a information launch. “Banks shouldn’t be baiting individuals with guarantees they cannot dwell as much as.”
In a press release, Capital One denied the allegations and stated it transparently marketed its 360 Performance Savings account.
“We are deeply disenchanted to see the CFPB proceed its latest sample of submitting eleventh hour lawsuits forward of a change in administration. We strongly disagree with their claims and can vigorously defend ourselves in court docket,” the corporate stated in a press release.
The financial institution added the 360 Performance Savings product was “marketed broadly, together with on nationwide tv, with the best and most clear phrases within the business.”
