The Consumer Financial Protection Bureau filed a lawsuit Tuesday against Capital One, accusing the bank of withholding $2 billion in interest from customers by steering them into lower-yield savings accounts. The complaint, lodged in Virginia federal court, alleges the bank used deceptive practices to keep millions of depositors in outdated accounts while offering better interest rates on new products.
Allegations of Deceptive Practices
According to the CFPB, Capital One enticed customers with promises of “top-tier interest” rates for its “360 Savings” accounts but later introduced a superior “360 Performance Savings” product. The bank allegedly failed to inform existing customers about the new, higher-yield option, effectively freezing them in the lower-paying accounts.
The bureau claims this strategy allowed Capital One to avoid paying substantial interest to customers, amounting to more than $2 billion. CFPB Director Rohit Chopra called the alleged actions a betrayal, 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.”
Details of the Complaint
Capital One NA and its parent company, Capital One Financial Corp., are named as defendants in the lawsuit, which seeks penalties, restitution for affected consumers, and other remedies. The CFPB accuses the bank of abusive and deceptive practices under the Consumer Financial Protection Act, along with violations of the federal Truth in Savings Act. The latter governs the advertising and disclosure of deposit account terms to ensure transparency for consumers.
Impact on Customers and Bank’s Response
The lawsuit highlights the impact on millions of customers who were allegedly denied the opportunity to earn substantial interest. The CFPB asserts that by freezing interest rates on outdated accounts while promoting new high-yield accounts to attract fresh depositors, Capital One unfairly profited at the expense of loyal customers.
