The Consumer Financial Protection Bureau (CFPB) announced today it’s suing Capital One for “cheating millions of consumers” who held its flagship 360 Savings account out of more than $2 billion in interest.
In the lawsuit, the U.S. government’s consumer watchdog agency accused Capital One of freezing its 360 Savings account’s annual percentage yield (APY) at a low level as rates rose nationwide, while it introduced the higher-earning 360 Performance Savings account and didn’t notify 360 Savings account holders about the new product.
The new 360 Performance Savings account differed from the old account “only in that it paid out substantially more in interest — at one point more than 14 times the 360 Savings rate,” the CFPB wrote in a press release, which also stated the bank worked to keep 360 Savings account holders in the dark about the higher-yielding account.
The CFPB said Capital One lowered and froze its 360 Savings account’s APY to 0.30 percent from late 2019 to mid-2024, while it increased the new 360 Performance Savings account’s APY from 0.40 percent to 4.25 percent between April 2022 and January 2024.
According to the lawsuit, Capital One prohibited employees from proactively telling 360 Savings account holders about 360 Performance Savings.
The CFPB’s lawsuit alleges:
- Capital One violated the Truth in Savings Act by describing its 360 Savings account’s interest rate as one of the nation’s “top” and “highest,” and that it would earn much higher interest than the average savings account.
- Capital One misrepresented its 360 Savings account to existing customers as its only high-interest savings product, while it “obscured from those customers its newer, much-higher-interest 360 Performance Savings accounts.”
“Banks should not be baiting people with promises they can’t live up to,” said CFPB Director Rohit Chopra.
The lawsuit aims to stop the bank’s “unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund,” according to the agency’s statement.
In a response, a Capital One spokesperson said the newer 360 Performance Savings account was marketed widely, including on national television.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration,” the Capital One spokesperson said. “We strongly disagree with their claims and will vigorously defend ourselves in court.”
How to ensure you’re earning the highest APY
You may have shopped around for the highest APY before you opened your savings account, although it’s just as important to make sure your rate remains competitive over time.
“Be sure to check your account statements every month and verify the APY you’re earning,” says Greg McBride, CFA, Bankrate chief financial analyst. “That is particularly important at a time when interest rates are on the move, but is also a regular part of good financial housekeeping to make sure you’re getting the best return on your money.”
If you realize you could be earning a better rate, it could be time to shop for a high-yield savings account elsewhere or evaluate the other deposit accounts your bank is offering.
“If you find that your account isn’t paying a competitive return, see if the bank has a different account that suits your needs and offers a better yield,” McBride says. “That might mean switching from a money market account to a savings account. If your bank isn’t offering competitive returns, there are plenty of other federally insured banks and credit unions that pay higher rates.”
Other recent CFPB actions
In recent weeks, the consumer watchdog agency has filed various other lawsuits against big banks, corporations and agencies:
- In December 2024, the CFPB filed a suit against JPMorgan Chase, Bank of America and Wells Fargo, alleging they failed to prevent more than $870 million in customer losses resulting from Zelle fraud.
- This month, the CFPB sued consumer reporting agency Experian for allegedly failing to properly investigate consumer disputes, resulting in incorrect information on credit reports.
- Last month, the agency filed a suit against Walmart and mobile app provider Branch Messenger, alleging they illegally opened costly deposit accounts for more than 1 million delivery drivers.
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