The Consumer Financial Protection Bureau (CFPB) is filing a lawsuit against the ninth largest bank in the US for allegedly misleading and defrauding customers out of billions of dollars in interest.
The CFPB alleges that Capital One misled consumers into believing that its product known as “360 Savings” offered the best and highest interest rates in the US.
However, the CFPB says Capital One kept interest rates on the 360 savings account low even as they rose across the country. In the lawsuit, “Capital One avoided paying more than $2 billion in additional interest to millions of customers because of these actions.”
While marketing the 360 savings account as offering attractive rates, Capital One simultaneously launched a similarly named product that promised significantly higher rates, according to the CFPB.
“Around the same time, Capital One created a nearly identical product called “360 Performance Savings,” which differed from 360 Savings only in that it paid significantly more in interest – at one point more than 14 times the 360 Savings rate. Capital One has 360 savings account holders were not specifically informed about the new product and instead worked to keep them in the dark about these higher paying accounts.”
CFPB says Capital One deliberately took steps to prevent 360 savings account holders from learning about the 360 Performance Savings Account.
“For example, Capital One named and sold the two products similarly; It eliminated almost all references to the 360 Savings Account product on its website and replaced them with references to the essentially identical 360 Performance Savings Account, with no notice that 360 Savings continued as a distinct product; It excluded 360 savings account holders from a marketing campaign that advertised 360 performance savings to Capital One’s other existing customers; And it prohibited its employees from proactively telling 360 savings account holders about 360 performance savings. ”
The lawsuit seeks to stop Capital One’s alleged unlawful conduct and provide compensation to harmed consumers if successful. The director of the financial regulator, Rohit Chopra, says, says
“The CFPB is suing Capital One for cheating families out of billions of dollars in their savings accounts. Banks should not lure people with promises they cannot keep. “
Capital One has just over $483 billion in total assets as of September 30, 2024, according to the Federal Reserve.
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