The Consumer Financial Protection Bureau has sued Capital One for allegedly cheating customers out of more than $2 billion in interest on their savings accounts.
In the lawsuit, which is also levelled at the bank’s parent holding company, Capital One Financial Corp., CFPB alleges that consumers were promised one of the nation’s “best” and “highest” interest rates through its flagship “360 Savings” accounts.
However, the bank reportedly froze the interest rate at a low level while rates rose nationwide, and, around the same time, Capital One created a near identical product, “360 Performance Savings” that paid out substantially more in interest.
At one point, it was delivering 14 times more in interest than the original 360 savings accounts, and CFPB says that Capital One did not specifically notify 360 Savings accountholders about this new product.
The Bureau alleges that by keeping customers in the dark on the new account type Capital One cost millions of consumers more than $2 billion in lost interest payments.
“Banks should not be baiting people with promises they can’t live up to,” said CFPB Director Rohit Chopra.
"We are deeply disappointed to see the CFPB continue its recent pattern of filing 11th hour lawsuits ahead of a change in administration,” a Capital One spokesperson was reported as saying on Tuesday (Wednesday AEDT). “We strongly disagree with their claims and will vigorously defend ourselves in court.”
Capital One (NYSE: COF) is set to report its Q4 2024 earnings on Tuesday, 21 January, followed by a conference call to discuss financial and operating performance for the quarter ended December 31, 2024.