CFPB Sues Capital One Over Deceptive Practices
The Consumer Financial Protection Bureau (CFPB) has sued Capital One for cheating millions of consumers out of more than $2 billion in interest.
The CFPB alleges that Capital One promised consumers that its flagship “360 Savings” account provided one of the nation’s “best” and “highest” interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. Around the same time, Capital One created a virtually identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest—at one point more than 14 times the 360 Savings rate.
Capital One did not specifically notify 360 Savings accountholders about the new product, and even marketed the two products similarly to lead customers to believe they were the same. The company also forbade its employees from proactively telling 360 Savings accountholders about 360 Performance Savings. Consumer who kept using the older 360 Savings accounts lost out on more than $2 billion in interest.
The agency says that from late 2019 to mid-2024, Capital One lowered and then froze the 360 Savings account rate to just 0.30%, even as rates increased nationwide. In contrast, Capital One increased the 360 Performance Savings account rate from 0.40% in April 2022 to 3.30% as of January 2023, and 4.35% as of January 2024.
The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund.
A similar lawsuit was filed by Capital One customers back in November of 2023.
Credit: Source link
