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Capital One charged with cheating customers out of $2 billion

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Photo: Jmswllms0

Another reason why consumers should avoid using big banks when they can.

The Consumer Financial Protection Bureau sued Capital One Tuesday for cheating millions of consumers out of more than $2 billion in interest.

The CFPB alleges that Capital One promised consumers that its flagship “360 Savings” account provided one of the nation’s “best” and “highest” interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. Around the same time, Capital One created a nearly identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest — at one time more than 14 times the 360 Savings rate.

Capital One didn’t specifically notify 360 Savings accountholders about the new product, and instead worked to keep them in the dark about these better-paying accounts, according to the lawsuit.

The CFPB alleges that Capital One obscured the new product from its 360 Savings accountholders and cost millions of consumers more than $2 billion in lost interest payments. The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil penalties, which would be paid into the CFPB’s victims relief fund.

“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” CFPB Director Rohit Chopra said in a statement. “Banks should not be baiting people with promises they can’t live up to.”

 

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