The Consumer Financial Protection Bureau (CFPB) has introduced a $2 billion procurement against Capital One, alleging that the bank misled millions of consumers with its savings account offers. The federal watchdog’s allegations paint a picture of a calculated scheme that goes far beyond typical bank marketing tactics.
The CFPB alleges that Capital One used two similarly named products, 360 Savings and 360 Performance Savings, to create a two-tiered system where existing savings account customers were purposefully charged a dramatically lower interest rate than is marketing to new customers.
In order to actively keep 360 Savings customers in the dark about the much higher rates offered by the 360 Performance Savings account, the agency claims that the bank attracted new customers without paying existing depositors the interest they were promised .
Capital One vigorously refutes the CFPB’s claims. In a statement to Fortune, a Capital One representative wrote, “We strongly agree with their claims and will defend ourselves vigorously in court.” Regarding its products, the statement said that, “Our flagship product 360 Performance Savings has been marketed widely, including on national television, with the simplest and most transparent terms in the industry.”
As someone who has written about financial products for over a decade, I like to think of myself as immune to the common mistakes that regular consumers can make. But the truth of the matter is that the CFPB lawsuit exposed a doozy of a mistake I made with my own Capital One savings account.
Here’s what I did to fix it and what you should do to make sure you don’t lose hundreds of dollars in interest that you should be earning, not just from Capital One, but from all of your savings accounts.
As a long-time Capital One customer who has both checking and savings accounts with the bank, my accounts are all linked so I can easily move money between the two. Like most people, both accounts were mostly on autopilot – I didn’t pay attention to the savings account. annual percentage yield (APY).
So imagine my surprise when I logged into my Capital One account after reading about the lawsuit and realized I was one of the customers earning a token interest rate instead of what 360 Performance Savings account holders get. they receive
In my case, it was the difference between earning 0.1% APY and 3.8% APY. If he had saved $10,000 in the account, this would have made a difference of $370 a year in interest income.
If you’re a Capital One savings account holder, here’s what you need to know.
First of all, determine what type of Capital One savings account you have. The lawsuit primarily concerns two accounts, the 360 Savings Account and the 360 Performance Savings Account.
The CFPB says Capital One kept interest rates low on 360 Savings accounts while offering significantly higher rates on newer 360 Savings accounts without properly informing existing customers.
To find your current rate:
Log in to your Capital One online banking portal
Navigate to your savings account details
Look for interest rate or APY information
Compare your existing account’s APY to other accounts offered by Capital One to make sure you’re in the best offer for your financial goals.
If you have a 360 Savings account with a lower interest rate, you may want to consider switching to a 360 Performance Savings account, or another one. high yield savings account. Here’s how:
Log in to your Capital One online bank
Select “Open a new account”
Choose “360 Performance Savings”
Follow the prompts to open the new account
Transfer funds from your old account to the new one
After reviewing my interest rates and realizing the huge difference between my rate and the best rate offered, I moved my savings into a new 360 Performance Savings account. Moving the money took less than five minutes and the new account shows up next to my existing one on my home page, so there’s no new login or password to remember.
Remember, you are not obligated to stay with Capital One. Shop and compare prices from others banks and credit cooperatives to ensure you get the best deal for your savings.
Keep a close eye on your Capital One savings account in the coming months. The bank may make changes in response to the lawsuit, potentially including automatic account updates or interest rate adjustments.
Follow reputable financial news sources for updates on the lawsuit and any action Capital One is taking in response. The CFPB’s website (consumerfinance.gov) is also a valuable resource for official information and consumer guidance.
As a consumer, you have the right to clear and accurate information about your financial products. If you believe you have been misled or treated unfairly by Capital One, the first step is to contact Capital One to discuss your concerns. If you do not receive a satisfactory response, you can file a complaint with the CFPB at consumerfinance.gov/complaint.
Following high-profile lawsuits, scammers often try to take advantage of confused consumers. Beware of calls, emails, or messages claiming to be from Capital One or the CFPB. Always verify the authenticity of any communication before providing personal or financial information.
If the CFPB’s lawsuit is successful, affected consumers may be eligible for compensation. While it’s too early to know the outcome, keep records of your Capital One savings accounts, including:
These documents may be useful if you need to file a claim in the future.
Capital One heavily advertises their 360 Performance Savings account, but when I go to my Capital One account home page, there is a link where I can “explore other products,” but no description of what those products are. There is a link where I can check my savings account rate, but not one that explains that much higher rates are available.
The CFPB says Capital One is hiding information about higher fees from existing customers. I am not sure if this is true, but it is safe to say that the bank does not make it easy or intuitive for current customers to get the best deal. I am ashamed to have made this kind of mistake, but it is an easy mistake to make.
As a current customer of Capital One who also has an understanding of the costs of acquiring customers in the bank, I am frankly perplexed at the short-sightedness of a bank that does not ensure that current customers are being treated even – or frankly better than new customers.
This lawsuit serves as a reminder of the importance of actively managing your finances. Regularly review your bank accounts, compare interest rates, and don’t hesitate to switch financial products if there are better options.
