Capital One Savings Account $425 Million Settlement
Capital One has agreed to a $425 million settlement to resolve a class-action lawsuit that accused the bank of misleading customers about interest rates tied to its savings accounts. The lawsuit alleged that the bank quietly kept customers in low-yield 360 Savings accounts while offering significantly higher interest rates in its newer 360 Performance Savings accounts. This is a different lawsuit from the one filed by the CFPB, which was later dropped.
The timing of this settlement is particularly notable, as it coincides with Capital One’s $35.3 billion acquisition of Discover Financial Services, which was finalized on May 18. That deal is one of the biggest in the financial services sector in recent years.
What Was the Issue?
The complaint focused on Capital One’s failure to clearly notify customers that they could switch to the higher-interest 360 Performance Savings account. While the older 360 Savings accounts were offering just 0.3% in annual interest, the newer product offered rates of up to 4.35%. Many long-time customers remained in the low-yield accounts, unaware of the better options.
Currently, the 360 Performance Savings account is offering 3.60% and the 360 Savings account if offering only 0.50% in annual interest. To see how much you are earning with your Capital One account, you can log in online and click “View Account Details”.
Though Capital One has not admitted to any wrongdoing, the settlement aims to compensate affected customers for the interest income they missed out on, based on the difference in interest between these two accounts.
Who Is Eligible for a Refund?
The settlement applies to individuals who held a Capital One 360 Savings account at any point from September 18, 2019, to the present. These customers may be entitled to a share of the settlement if they did not transition to a higher-yield 360 Performance Savings account during that time.
How Will the Money Be Distributed?
- $300 million will go toward reimbursing affected account holders for the lost interest.
- $125 million will be distributed to current 360 Savings account holders as additional interest
Further instructions for claiming compensation are expected to be sent to eligible customers, either by email or mail. Those included in the settlement class may also receive instructions via a dedicated claims website once it goes live.
Guru’s Wrap-up
For consumers, this settlement serves as a reminder to regularly review financial accounts and ensure they’re receiving the most competitive rates available. While many banks offer newer products with better terms, they don’t always make it easy or obvious for existing customers to switch.
Be sure to keep an eye on your email or mailbox in the coming months if you had a 360 Savings account with Capital One since 2019. You could be entitled to a portion of the settlement.
