Capital One sued by US watchdog alleging bank cheated customers out of $2 billion
A U.S. watchdog is suing Capital One for allegedly misleading consumers about its offerings for high-interest savings accounts — and “cheating” customers out of more than $2 billion in lost interest payments as a result
NEW YORK — A U.S. watchdog is suing Capital One for allegedly misleading consumers about its offerings for high-interest savings accounts — and “cheating" customers out of more than $2 billion in lost interest payments as a result.
In a complaint filed Tuesday, the Consumer Financial Protection Bureau took aim at Capital One's promises and handling of its “360 Savings” accounts. Despite promoting 360 Savings as an account that provides one of nation's highest interest rates, the CFPB alleges that Capital One froze its rate at a low level for at least several years, even as rates rose nationally.
At the same time, the CFPB adds, the bank created “360 Performance Savings," which saw a much higher rate grow. But the agency says that Capital One did not notify 360 Savings accountholders about this new offering and “instead worked to keep them in the dark" — alleging that the company marketed the products similarly to obscure their distinction and forbade employees «from proactively telling” those with 360 Savings accounts about 360 Performance Savings.
These actions mean Capital One “illegally avoided paying billions in interest to millions of consumers,” the CFPB wrote in its Tuesday complaint. The agency says it’s seeking to impose civil penalties and provide financial relief to those impacted.
“Banks should not be baiting people with promises they can’t live up to,» CFPB Director Rohit Chopra said in a prepared statement.
In response, Capital One said that it strongly disagreed with the CFPB's allegations
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