US watchdog sues Capital One, alleges bank cheated customers out of $2B

Jan 15

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Craig Nigrelli Anchor

By Craig Nigrelli (Anchor), Brock Koller (Senior Producer), Shea Taylor (Producer), Kaleb Gillespie (Video Editor)

The Consumer Financial Protection Bureau (CFPB) is suing Capital One, alleging the bank misled customers about its high-interest savings accounts. The CFPB says Capital One allegedly cheated customers out of more than $2 billion in interest payments.

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The lawsuit claims Capital One froze the interest rate on its “360 Savings” accounts, even as rates rose nationally while introducing a new product, “360 Performance Savings,” with significantly higher rates. The CFPB said Capital One failed to notify existing account holders about the new product and barred employees from proactively sharing information about the higher-paying account.

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The agency is seeking civil penalties and financial relief for impacted consumers. Capital One denied the allegations and said it plans to defend itself in court.

The bank emphasized its products offered competitive rates and were available to all customers without restrictions.

Currently, “360 Savings” accounts offer an interest rate of just under 0.50%, while “360 Performance Savings” accounts offer about 3.74%. At one point, the difference between the two rates was as high as 14 times.

The lawsuit comes as the banking giant faces heightened scrutiny ahead of President-elect Donald Trump’s inauguration. Analysts noted that similar litigation proceeded under Trump’s first term and believe this case could move forward as well. The CFPB emphasized that financial institutions must remain transparent in their offerings and avoid misleading customers about potential interest gains.

Tags: consumer financial protection bureau, Credit card, credit card debt, financial literacy, Interest rates, personal finance

[craig nigrelli]

THE CONSUMER FINANCIAL PROTECTION BUREAU IS SUING CAPITAL ONE — SAYING THE BANK MISLED CONSUMERS ABOUT ITS OFFERINGS FOR HIGH-INTEREST SAVINGS ACCOUNTS AND CHEATED CUSTOMERS OUT OF MORE THAN 2 BILLION DOLLARS IN INTEREST PAYMENTS AS A RESULT.

THE LAWSUIT FILED ON TUESDAY FOCUSES ON CAPITAL ONE’S PROMISES AND HANDLING OF ITS “3-60 SAVINGS” ACCOUNTS.

THE BUREAU SAYS DESPITE PROMOTING 3-60 SAVINGS AS AN ACCOUNT **THAT PROVIDES ONE OF NATION’S HIGHEST INTEREST RATES**, CAPITAL ONE FROZE ITS RATE AT A LOW LEVEL FOR AT LEAST SEVERAL YEARS, – EVEN AS INTEREST RATES NATIONALLY, ROSE.

THE C-F-P-B SAYS AT THE SAME TIME — CAPITAL ONE CREATED “3-60 PERFORMANCE SAVINGS” — WHICH SAW A MUCH HIGHER RATE GROWTH — BUT DID NOT NOTIFY 3-60 SAVINGS ACCOUNT HOLDERS ABOUT THIS NEW OFFERING AND INSTEAD QUOTE ” WORKED TO KEEP THEM IN THE DARK.”

THE LAWSUIT ALLEGES THE COMPANY MARKETED THE PRODUCTS SIMILARLY TO OBSCURE THEIR DISTINCTION AND BANNED EMPLOYEES FROM “PRO-ACTIVELY TELLING” THOSE WITH 3-60 SAVINGS ACCOUNTS ABOUT 3-60 PERFORMANCE SAVINGS.

THE CONSUMER FINANCIAL PROTECTION BUREAU IS SEEKING TO IMPOSE CIVIL PENALTIES ON CAPITAL ONE AND PROVIDE FINANCIAL RELIEF TO THOSE IMPACTED.