The Consumer Finance Protection Bureau is suing Capital One, as it claims the bank failed to pay more than $2 billion in interest to its customers.
The consumer bureau, a federal agency responsible for consumer protection in the finance sector, alleges Capital One marketed its 360 Savings account as having some of the best interest rates in the country but did not mention to those customers that its newer product, the 360 Performance Savings account, had interest rates of up to 4.35%, compared to the 0.30% rate of 360 Savings.
The agency alleges the bank "schemed" for members to keep their lower-yield 360 Savings accounts open by freezing their interest rates, giving the lower- and higher-yield accounts similar names and not marketing the higher-yield accounts to them.
"The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts," said CFPB Director Rohit Chopra. "Banks should not be baiting people with promises they can't live up to."
Capital One didn't immediately respond to a query from NPR, but in a statement provided to The Associated Press, it said it is "deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration." The bank added that its 360 products "have always been available in just minutes to all new and existing customers without any of the usual industry restrictions," the AP reported.
The CFPB said with its lawsuit it intends to stop Capital One's allegedly unlawful practices and have it give civil penalties to a CFPB victims relief fund.
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