A PROMINENT financial institution is now facing a lawsuit from the federal government.
It was accused of misleading customers with offers on certain savings accounts by the Consumer Financial Protection Bureau (CFPB).
A prominent bank has come under fire for allegedly misleading customers (stock image)[/caption]
Those who had a certain savings account were allegedly affected[/caption]
The Consumer Financial Protection Bureau claims Capital One kept billions from customers (stock image)[/caption]
The CFPB filed the suit on Tuesday, slamming Capital One and claiming it didn’t honor promises it made for those who signed up for its 360 Savings accounts, per a press release.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” CFPB director Rohit Chopra said.
“Banks should not be baiting people with promises they can’t live up to.”
Capital One allegedly told Americans they would get the nation’s “best” and “highest” interest rates when placing their money in a 360 Savings account, but later froze those interest rates at a lower level while they rose everywhere else.
Additionally, the CFPB said Capital One later created 360 Performance Savings, which was “effectively” the same thing, but paid out about 14 times more than the 360 Savings rate during a certain period.
Capital One allegedly did not directly notify 360 Savings customers about the new 360 Performance Savings, and “instead worked to keep them in the dark” about it, according to the suit.
The CFPB argued that, as a result, a few million customers with Capital One lost a collective $2 billion in interest payments due to not being notified about 360 Performance Savings.
Capital One was accused of unlawful conduct, and the CFPB demanded it “provide redress for harmed consumers” in the release.
The bureau is also calling for the financial institution to pay civil money penalties in a relief fund for those affected.
The U.S. Sun has contacted Capital One for an official comment on the lawsuit and its claims.
NOT THE SAME
Data noted in the CFPB’s release showed that the 360 Savings account rate was frozen at 0.30% in 2019.
Meanwhile, the 360 Performance Savings rate — which began in early 2022 — gradually increased from 0.40%, to 3.30%, and 4.35% as of January 2024.
The CFPB claims Capital One then “eliminated all references to the 360 Savings account product on its website and replaced them with references to the essentially identical 360 Performance Savings account.”
That way, according to the CFPB, customers would fail to properly identify 360 Savings and 360 Performance Savings as two distinctly different accounts with very different interest rates.
How to contact your bank
WITH bank scams running rampent, it is important to know how to reach out to your bank without risking fraud.
There is of course the foolproof method of going to your bank in person, but you are likely going to be directed to a customer care phone line.
In order to ensure that you are contacting the bank, make sure to use a phone number given to you by the representative or off of the bank’s website.
Some banks also have online helplines that can securely connect you with a representative.
Conversely, if you think the bank is reaching out to you with an account issue – make sure to verify the concern by calling a bank contact that you know is legitimate.
Scammers commonly mascarade as bank representatives to steal information from frightened customers.
LAW BROKEN?
This lack of distinction allegedly kept them thinking they would still get the nation’s “best” and “highest” interest rates with 360 Savings alone.
Capital One also allegedly told employees to not proactively mention the 360 Performance Savings account to 360 Savings accountholders.
The CFPB concluded in its claims that Capital One violated the Truth in Savings Act and “schemed” and “illegally deceived” customers, using 360 Performance Savings only to bring in new accountholders and deter 360 Savings users from signing up.
“Capital One avoided paying more than $2 billion in additional interest to millions of customers because of these actions,” the CFPB emphasized in the release.
The Truth in Savings Act is federal law requiring banks to provide customers with specific and clear information about terms and costs of accounts, per the American Bankers Association.
Capital One dolled out $190 million to settle a lawsuit in 2022 after a data breach that affected about 98 million Americans.
The financial institution also made waves last February when it proposed a multi-billion-dollar deal to acquire Discover.
