• The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, claiming the bank misled customers about its savings accounts.
• Capital One allegedly cheated customers out of more than $2 billion in interest payments by freezing low rates while promoting high-interest variants.
• The lawsuit highlights the bank's failure to properly inform consumers about differences between the "360 Savings" and "360 Performance Savings" accounts.
• The CFPB seeks civil penalties and financial relief for impacted customers, arguing that Capital One's actions are unlawful and harmful.

A recent lawsuit filed by the Consumer Financial Protection Bureau (CFPB) against Capital One has stirred significant attention as the agency claims the bank misled consumers regarding its high-interest savings accounts, effectively "cheating" them out of over $2 billion in lost interest payments. The complaint, lodged on Tuesday, specifically targets the bank's handling of its "360 Savings" accounts, which were marketed as offering some of the highest interest rates in the nation, a claim the CFPB disputes.

According to the CFPB, while promoting these savings accounts, Capital One "froze" the interest rate at a mere 0.30% for an extended period, between December 2020 and at least August 2024, despite rising interest rates nationwide. Meanwhile, the bank introduced a competing product, the "360 Performance Savings", which boasted rates that skyrocketed to as high as 4.35%, significantly surpassing the 360 Savings account rates at times, even exceeding fourteenfold.

CFPB Director Rohit Chopra stated, "Banks should not be baiting people with promises they can't live up to," emphasizing the agency's responsibility to protect consumers from such deceptive practices. The CFPB further alleges that Capital One actively obscured the distinctions between the two accounts, not informing the customers holding 360 Savings about the more beneficial 360 Performance Savings, and forbidding employees from proactively informing them about the latter's higher rates. These actions, they claim, allowed Capital One to "illegally avoid paying billions in interest to millions of consumers."

In its defense, Capital One has publicly expressed strong disagreement with the allegations and plans to "vigorously defend" itself in court. In a statement, the bank expressed its disappointment with the CFPB’s actions, highlighting that its savings products have always been readily accessible to consumers without the usual industry restrictions. Customers of the 360 Savings accounts currently yield below 0.50% in interest, significantly lagging behind the competitive rates offered to more recent account holders.

The CFPB is now looking to impose civil penalties on Capital One while pushing for financial relief to affected customers, aiming to put an end to their allegedly unlawful practices. You can read the full details of the case in the official CBS News report.