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Capital One allegedly defrauded savings account holders out of billions in interest income

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.


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2025-01-17 11:01:00

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