Capital One Lawsuit Over Deceptive Interest Rates Practices
Capital One is facing a lawsuit that claims the company mislead customers about the interest rates on their accounts. The plaintiffs argue that rather than increasing rates on its longstanding 360 Savings account, Capital One introduced a new high-yield account called the 360 Performance Savings.
The lawsuit says the move lead to significant losses for account holders since September 2019, especially following the Federal Reserve’s swift interest rate hikes in March 2022.
Existing 360 Savings customers who would want to take advantage of higher yields in the current higher-rate environment would have to open a 360 Performance Savings account, according to the lawsuit.
That’s what I did. I have both accounts myself, and I opened the new 360 Performance Savings when the offered one of the frequent signup bonuses. Currently the 360 Savings account earns only 0.30% APY, while the 360 Performance Savings offers 4.30% APY. That’s a huge difference.
“Capital One’s conduct caused its 360 Savings account holders to lose millions of dollars of interest in the aggregate since September 2019, and especially since interest rates began rising rapidly in March of 2022,” the lawsuit states.
“There were, and are, no material differences between these two accounts other than the interest rate,” lawyers for the plaintiffs wrote. “Capital One did not notify its 360 Savings account holders that the 360 Performance Savings account was available, that 360 Performance Savings was, in fact, a different account and not just another name for the 360 Savings account, or that 360 Performance Savings paid a higher rate of interest.”
Plaintiffs argue that Capital One breached its contract with 360 Savings customers, saying that even though the bank had the discretion to establish the interest rate it paid, it did not engage in good faith and fair dealing. The lawsuit also alleges that Capital One violated certain state laws in Illinois, Virginia, Massachusetts and Pennsylvania, which deal with consumer protection and deceptive business practices. It seeks monetary damages plus an end to Capital One’s alleged misconduct, such as through an order that the bank convert all 360 Savings accounts to 360 Performance Savings accounts.
The lawsuit was first reported at Yahoo Finance.