The Consumer Financial Protection Bureau sued Capital One (COF+1.89%) on Tuesday for allegedly “cheating” people out of billions of dollars in interest payments on savings accounts.
The regulator alleged that Capital One advertised its 360 Savings account as a “high interest” account with a variable rate that it claimed was one of the best in the country. The bank then allegedly froze interest rates for those accountholders and stopped offering it to new customers after 2019. It then introduced an almost identical 360 Performance Savings account, differing only in that it paid out “substantially more” in interest, the agency said.
“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 statement. “Banks should not be baiting people with promises they can’t live up to.”
A Capital One spokesperson said the company is “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration,” and that it will “vigorously” defend itself in court.
At one point last summer, the 360 Performance Savings account paid more than 14 times the 360 Savings rate, according to the complaint. The CFPB alleged that Capital One didn’t notify 360 Savings accountholders about the new offering, instead keeping them in the dark about better-paying options.
“As a result of Capital One’s actions, 360 Savings accountholders either were not aware of 360 Performance Savings or were misled into believing their 360 Savings accounts were 360 Performance Savings accounts with the higher rate,” the complaint said.
That resulted in accountholders collectively missing out on almost $2 billion in interest payments on their savings accounts, the CFPB claimed.
Rates on high-yield or high interest savings accounts can be as much as 15 times higher than the Federal Deposit Insurance Corporation national average savings account rate, and 10 to 12 times higher than “traditional” savings account rates.
The 360 Savings account, however, offered a 0.30% rate between December 2020 and August 2024. That’s well below the 0.46% national average as of last August, according to the FDIC.
Between April 2022 and August 2024, Capital One raised the 360 Performance Savings rate from 0.40% to 4.25%, the complaint alleged.
Capital One did not immediately respond to Quartz’s request for comment.
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