In a dramatic twist to a closely watched banking case, a Virginia federal judge has rejected Capital One’s proposed $425 million settlement, declaring that the deal shortchanges millions of customers who accuse the bank of deceptively marketing its 360 Savings accounts.
U.S. District Judge David J. Novak on Thursday refused to approve the agreement, saying that while the settlement was procedurally sound, it fell “neither reasonable nor adequate on substance.”
Less Than 10% Recovery for Customers, Court Finds
Judge Novak sharply criticized the proposed deal, noting that, depending on calculations, the consumer class could recover less than 10% of their actual damages. He also said the settlement offered no meaningful relief to roughly three-quarters of the affected class—current 360 Savings account holders—who continue to experience financial harm.
“Under the proposed settlement, these millions of class members would continue to experience the same financial harm that they have already experienced for years,” Novak wrote.
The judge emphasized that despite the case’s challenges—including class certification and the burden of proof—the strength of the plaintiffs’ claims warranted far greater compensation.
