Update 2/27/25: This case has now been dismissed, apparently as part of the diminishment of the role of CFPB, per news sources.
Original Post 1/14/25:
I find this lawsuit against Capital One fascinating: (CFPB article link)
CFPB is suing Capital One for cheating consumers out of $2B in savings account interest. See, Capital One froze the interest rate on their ‘360 savings’ account at .30% in 2019 and opened a new version called the ‘360 Performance Savings account’ which continued to increase its rates as interest rates rose.
We’ve seen many banks employ this kind of strategy. Essentially they want to lock in the older customers at the lower rate to pad their profits, and then use the new account product to lure new customers.
In the case of Capital One, the strategy was particularly egregious since they marketed widely their higher-than-average 360 Performance account with a name similar to the old 360 account. This led users of their old version to assume they are earning the higher rate.
In our list of Best High Yield Savings Accounts we try highlighting which banks take the low road and split out accounts to avoid increasing rates for older customers. The better banks steadily increase and decrease interest rates along with market norms.
Those affected by this Capital One scandal are likely people who are busy or older and never stopped to look through their statements and analyze interest rates. It can be, for example, someone who was advised to open the 360 account with the expectation that it would keep up with interest rates and then never followed up to see what rates are being earned.
Beyond the specific lawsuit against Capital One, I find this case intriguing since it can potentially reverberate in the wider banking industry as banks fear the CFPB’s wrath when using these types strategies. Hopefully this will result in banks doing away with the account splitting strategy, and offering all customers consistent interest rates.
Thank you DOC. My 78 year old mother had an old ING Orange account acquired by Cap 1. Not knowing there were 2 different Cap 1 360 savings accounts, I encouraged her to send and keep more funds there over her local low paying interest bearing checking at TD.
After reading about the suit here on DOC, we checked her statement and sure enough it was the plain older 360 Savings (without Performance). APY .50%. Called and switched right away but she had $100k sitting there thinking it was a HYSA. Probably over $10K in lost interest since rates started rising.
This isn’t that hard guys. As soon as I noticed this, I simply opened the new account getting the higher yield and then just moved over all my money from the other one. So much drama for no reason. Yea Capital One is the devil, all banks are, that’s why we take advantage of them.
It was the deception that was at issue. Yes, it is the consumers responsibility to watch interest rates. It’s also the consumers responsibility to read all terms and conditions but most don’t. It wouldn’t be right for a bank to bury something in those either. Cap 1 did it that way to mislead current customers.
i noticed the change too, several months later, and when the rep basically said I was sh*t outta luck, I pulled all funds and closed all accounts at Cap 1.
The better way to get back at them is to churn their bonuses as much as possible!
The industry has had such good customer experience the last few years. With Capital’s hostility toward Labor right now, I can see them reverting over time to their old games: long hold time, tricks to speak to an actual person, ‘sorry, the computer won’t let me do that’, ‘let me speak to a supervisor’, etc.
The $300 bonus won’t seem quite as fun if you have to argue for it. Not to mention, people who are just trying to use retail banking in the traditional sense and get hit by the banks stacking up hidden fees with no recourse.
R.i.p.
You first.
You got no cards I got all the cards. What a clown show. You’re going to have to pull up with Harvey Specter and his $12k suit, just to get your $300 worth of hilton points.
well I’m out of the bank bonus, credit card bonus applications. if you have to sue them to get your money what is the point. Its definitely crashed my spending and I know I am not alone. If they want to cheat us so badly then maybe we should just go back to cash. I don’t even trust the cash back credit cards anymore. seems like that is the next funny business.
What are you yappin about? I’ve been doing this bank account/credit card game for years & barely ever had an issue with bonuses being paid out. Honestly, I’d say 98% of the time I have no issue with tons of banks. Not trusting credit cards anymore? That’s a stretch right there.
Yeah, it’s almost as if everything is a scam these days… maybe it always was.
My elderly father was subject to this when he took out his capital one savings account. They switched him over to the new account and claim they will look into correcting the interest he never recieved.
What does “took out” mean?
What does edgelord mean?
In the article,
William Charles wrote “Capital One froze the interest rate on their ‘360 savings’ account at .30% in 2019 and opened a new version called the ‘360 Performance Savings account’ which continued to increase its rates as interest rates rose.”
I don’t know you and you don’t me so your insults don’t bother me at all!
Nice “your boos mean nothing, I’ve seen what makes you cheer” vibes.
My wife has one of these accounts and never paid attention to the fact she was getting hardly anything in interest. Now she will have no recourse for the years she has been denied appropriate interest. And yes, we are 70. So there you go.
How is your age relevant?
Direct DOC quote from the post:
“Those affected by this Capital One scandal are likely people who are busy or older and never stopped to look through their statements and analyze interest rates.”
It’s your responsibility to find the highest interest. Not the bank’s.
It happened to me too. And I worked in the wealth management business. They misled me with the similar names and it took me over a year to realize it. I moved my money to a competitor and I will never be back. What they did might well be legal, but it is unethical.
So what happens when you do but the bank goes back on its promise?
That’s a good catch by you and it explains why
Jeff wrote that. I read this article when it was 1st posted so I didn’t remember that exact line until you brought it up.
Anyway, I disagree with the implication from
William Charles that being “busy or older” is a good excuse for not doing your own due diligence. It is ultimately everyone’s own responsibility to keep up with things and make sure that they are maximizing their returns.
It’s considered despicable to steal from the elderly. Only the lowest of the low, the scum of the earth would do that.
That may be true but I don’t agree that what CO did here is “stealing”. We’ll have to agree to disagree.
It doesn’t have to be theft per se to be deceitful and/or violate consumer protection laws. In general and necessarily, the faculties of the elderly gradually deteriorate, and they are thus especially vulnerable to deceptive marketing practices.
Is this all really necessary to spell out?
There is nothing to disagree on. It is stealing/fraud or whatever you want to call it.
hE wAs RiGhT aBoUt EvErYtHiNg
What is this in reference to and why did you write it that way?
What is an eric and why are you asking questions?
He’s making fun of the orange king. You know the authoritarian d-bag that thinks he is the supreme ruler.
Is that how T writes on his social media site “T Social”? I wouldn’t know as I have never went on that site and never plan to.
Surely THIS will lower egg prices right? RIGHT?!?
Do you remember the chicken scenes from Baraka? That’d definitely lower the prices. Right?