The logo for consumer lending firm Capital One Financial Corp. spotted on its headquarters in McLean, Virginia, on Jan. 20. 2023. So, New York Attorney General Letitia James decided to sue Capital One on Wednesday, accusing the bank of “cheating” customers out of millions of dollars in interest payments. Bit of a sticky situation, huh? And get this, it all went down just months after the Trump administration’s Consumer Financial Protection Bureau dropped a similar suit against the financial institution. Talk about some drama!
According to the complaint filed in Manhattan federal court, James alleged that Capital One marketed its “360 Savings” account as its high-yield savings account. But then, they conveniently forgot to tell those customers about its shiny new “360 Performance Savings” product that offered much higher interest rates. Sneaky, sneaky. As interest rates started climbing up in 2022, Capital One apparently froze the interest rate of its 360 Savings product at a measly 0.3%. Meanwhile, they jacked up the rate of the 360 Performance Savings accounts to a whopping 4.35%. Ouch! That means New York 360 Savings customers missed out on “millions of dollars of interest.” Oh boy, someone’s in trouble now!
The suit even goes on to claim that Capital One told its employees to keep their lips sealed about the new product “unless they explicitly asked.” Sounds like someone was trying to sweep things under the rug, doesn’t it? And guess what? This isn’t the first time Capital One has been in hot water for this kind of stuff. The CFPB had a similar bone to pick with them, but that case got dropped back in February. The suit alleged that Capital One’s marketing tactics caused U.S. customers to miss out on over $2 billion in interest. Yikes! Looks like Capital One might need to clean up their act a bit, huh? Now, the New York suit is accusing Capital One of breaking both state and federal laws and is looking for some serious payback. Let’s see how this all plays out in court, shall we?
