Banks Under Fire: Capital One Accused of Misleading Consumers
A Multi-Billion Dollar Deception
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, alleging that the bank misled consumers about their savings account interest rates, resulting in a staggering loss of over $2 billion in interest. The CFPB claims that Capital One deceived holders of its “360 Savings” account by failing to notify them of a newer, higher-yield savings account option, the “360 Performance Savings” account.
A Tale of Two Accounts
The CFPB alleges that Capital One marketed the two accounts similarly, leading customers to believe they were the same. However, the interest rates of the two options were substantially different. While the 360 Performance Savings interest rate increased from 0.4% to 4.35% between April 2022 and January 2024, the 360 Savings rate was lowered and then frozen at 0.3% between late 2019 and mid-2024.
Deceptive Practices
The CFPB accuses Capital One of using deceptive practices to keep 360 Savings users in the dark about the higher-yield option. The bank allegedly replaced all references to the 360 Savings account with the 360 Performance Savings option on its website, excluded account holders from marketing campaigns, and forbade employees from notifying account holders about the higher-yield option.
A Pattern of Deception
CFPB Director Rohit Chopra stated, “Banks should not be baiting people with promises they can’t live up to.” Capital One has denied the allegations, claiming that it transparently marketed its 360 Performance Savings account. However, the CFPB’s lawsuit suggests a pattern of deception that has resulted in significant financial losses for consumers.
The Consequences of Deception
The lawsuit against Capital One serves as a reminder that banks have a responsibility to act transparently and honestly with their customers. As the CFPB continues to investigate and take action against deceptive practices, consumers must remain vigilant and informed about their financial options.
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