For allegedly deceiving clients about its high-interest savings account options and “cheating” them out of almost $2 billion in missing interest payments, a U.S. watchdog is suing Capital One. As per complaint submitted, CFB criticized Capital One for their “360 Savings” accounts and the promises it made.
Despite marketing 360 Savings as an account with one of the highest interest rates in the country, the CFPB claims that Capital One kept its rate low for a number of years, even as interest rates increased across the country.
By claiming that its 360 Savings account would provide much greater interest than the typical savings account and that its interest rate was among the “top” and “highest” in the country, Capital One broke the Truth in Savings Act. The more recent 360 Performance Savings account was extensively advertised, including on national television, according to a Capital One representative.
Capital One Sued by U.S. watchdog
Capital One has been sued by CFPB for allegedly not paying more than $2 billion in interest to its customers. Capital One claimed that their 360 Savings account offered some of the greatest interest rates in the country, according to the Consumer Bureau, a federal organization that oversees consumer protection in the financial sector. However, it neglected to disclose to those clients that, in contrast to 360 Savings’ 0.30% interest rate, its more latest offering, the 360 Performance Savings account, had interest rates as high as 4.35%.
President-elect Donald Trump’s inauguration on January 20 is just few days away from the CFPB’s lawsuit against Capital One. Some people believe that this lawsuit may still go on even after the administration changed. For instance, the CFPB continued to pursue enforcement actions during Trump’s first term, according to analyst comments from TD Cowen on Tuesday, even though it might be simpler to resolve such lawsuits under the next government.
Capital One’s response
In response, Capital One stated that it would “vigorously defend” itself in court and that it disagreed with the CFPB’s accusations. Additionally, the banking giant expressed its disappointment at the CFPB’s recent practice of bringing last-minute litigation before an administration transition. This indicates that the 360 Performance Savings rate is almost 7.5 times greater than the 360 Savings rate as of right now, however, the CFPB claims that in the past, they have been more distant. According to the agency’s complaint on Tuesday, in July 2024, the 360 Performance Savings rate was almost 14 times higher than 360 Savings.
Two Capital One savings accounts with strikingly similar names but disparate interest rates are under question. According to the CFPB, the names were purposefully used to confuse customers who believed the two accounts were identical higher-paying savings accounts but the change is very noticeable. Originally a higher-yield account available solely online, the classic 360 Savings account offered an interest rate of 0.3 percent between 2019 and 2024. A recently established 360 Performance Savings rate, meanwhile, increased from 0.4 percent in 2022 to 4.35 percent in January 2024.
Everything you need to know
The U.S. Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Capital One on Tuesday, alleging that the banking giant defrauded millions of customers with “high interest” savings accounts of over $2 billion in interest payments. In a complaint submitted to a federal court in Alexandria, Virginia, the CFPB criticized Capital One for its claims and management of its popular “360 Savings” program.
The Virginia-based bank claimed to offer one of the highest and “best” interest rates in the country and assured customers that the flagship account would yield far higher interest than the typical savings account, according to the watchdog group. Despite that promotion, the bank kept its flagship account rate at a low level of 0.30 percent for a number of years, from late 2019 to mid-2024, even as rates increased across the country. The lawsuit alleges that the bank used similar names and marketing strategies for the two programs.
How to ensure you are earning the highest APY?
It’s possible that you looked about for the best annual percentage yield (APY) before opening your savings account, but it’s as crucial to make sure your rate stays competitive over time. Check out different deposit accounts offered by your bank or look for a high-yield savings account elsewhere if you find that you could be earning a greater rate.
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Samarth Choudhary is a Chief Editor at keralacobank.com. He has overall editorial experience of 10 years in online media. He has completed his graduation from University of California and masters in Finance from University of Dallas in year 2010. His major interest and expertise is in Finance, Taxes, Government Aid and Schemes. His Major focus is to help users to get relevant information which are published on keralacobank.com in easy and precise form.