CFPB Sues Capital One Over Misleading Savings Accounts

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, the ninth-largest bank in the United States, accusing it of deceptive practices that allegedly cost customers billions in unpaid interest.

The CFPB claims that Capital One misled millions of customers by promoting its 360 Savings account as offering some of the highest interest rates in the country while keeping rates artificially low compared to rising market conditions.

Allegations of Deceptive Marketing

According to the lawsuit, Capital One launched a higher-paying savings account called 360 Performance Savings, which offered significantly better interest rates—up to 14 times higher than the 360 Savings account. However, the CFPB alleges that Capital One:

• Kept customers in the dark about the better-performing account.
• Excluded 360 Savings holders from marketing campaigns that promoted the 360 Performance Savings account.
• Removed references to 360 Savings from its website to obscure the distinction between the two accounts.
• Instructed employees not to inform customers about the higher-paying account unless asked directly.

By taking these actions, the CFPB claims Capital One avoided paying over $2 billion in additional interest to millions of account holders.

Consumer Impact and Legal Demands

The CFPB lawsuit seeks to:

1. Stop Capital One’s alleged unlawful practices.
2. Compensate affected customers for the interest they lost due to deceptive practices.

CFPB Director Rohit Chopra emphasized the gravity of the allegations, stating:

“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts. Banks should not be baiting people with promises they can’t live up to.”

Capital One’s Position

As of now, Capital One has not issued a public statement in response to the lawsuit. However, the bank’s $483 billion in total assets as of September 30, 2024, places it under significant scrutiny from both federal regulators and customers.

The lawsuit, if successful, could serve as a warning to other financial institutions about prioritizing profits over consumer trust and compliance.