Capital One (COF) is under scrutiny after the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against the bank, accusing it of unfairly withholding billions of dollars in interest from customers with its 360 Savings accounts. The lawsuit, filed on Tuesday, claims that Capital One misled consumers by advertising its 360 Savings account as offering one of the highest interest rates in the country.
The CFPB alleges that while the account was marketed with a variable rate that promised significant returns, the bank froze interest rates for existing customers and halted the offering to new account holders after 2019. Shortly after, Capital One introduced a new account, the 360 Performance Savings account, which reportedly paid out “substantially more” in interest.
According to the CFPB, this move effectively penalized those who had originally opened the 360 Savings account under the assumption they were getting competitive interest rates, causing significant financial harm to consumers. The lawsuit also suggests that the new account, though nearly identical, was marketed in a way that provided better terms for new customers, while existing customers were left at a disadvantage.
In response, a spokesperson for Capital One expressed disappointment, stating that the company believes the lawsuit is part of a broader pattern by the CFPB to file late lawsuits before the transition of government administrations. Capital One is vowing to vigorously defend itself in court.
As this legal battle unfolds, customers with Capital One savings accounts could face a long process ahead, while the lawsuit brings to light the broader issue of transparency and fairness in banking practices, particularly for consumers who rely on high-yield savings accounts for financial growth. Investors and customers alike will be watching closely to see how the case progresses and what impact it could have on the bank’s future.
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