Capital One Accused of $2 Billion Savings Scam

NEW YORK – Capital One is facing a firestorm of legal opposition, accused of systematically cheating its customers out of over $2 billion in promised interest payments. New York Attorney General Letitia James today led a bipartisan coalition of 17 other attorneys general in a direct challenge to a proposed class action settlement, calling it a blatant attempt by the bank to minimize accountability and prioritize profit over consumer restitution.

The core of the case revolves around Capital One’s 360 Savings accounts. Marketed as “high interest” options boasting “one of the nation’s best savings rates,” these accounts allegedly failed to deliver on their promises. While interest rates surged nationwide starting in 2022, Capital One deliberately kept rates on its 360 Savings accounts artificially low. Simultaneously, the bank introduced “360 Performance Savings,” a strikingly similar account offering significantly higher rates – at one point, more than 14 times greater than the standard 360 Savings.

Attorney General James’s lawsuit alleges that this two-tiered system was a deliberate bait-and-switch, designed to mislead customers and avoid paying the full interest owed. “Capital One customers worked hard for their savings, only to be misled and cheated out of billions of dollars in interest payments that their bank had promised them,” James stated. “Now, Capital One is pushing a settlement agreement that would let it off the hook for this illegal scheme. I am leading a bipartisan coalition of attorneys general in opposing this unfair settlement so we can truly hold Capital One accountable and get fair restitution for customers who were cheated.”

The proposed settlement, according to James and the coalition, would provide a paltry $125 million in additional interest to affected customers, a drop in the bucket compared to the estimated $2 billion Capital One allegedly withheld. Even with this addition, the 360 Savings rate would remain substantially lower than the 360 Performance rate. The AG’s office calculates that in the time it would take Capital One to distribute the $125 million, the bank would have earned over $800 million at the higher performance rate, effectively pocketing the difference.

“Capital One promised 360 Savings customers, ‘your money will earn much more than what it would in an average savings or money market account,’ yet continues to pay them below the national average,” the amicus brief filed today argues. The coalition is demanding the court reject the current settlement and push for a resolution that truly addresses the harm caused to Capital One’s customers and forces the bank to change its deceptive practices. The average consumer, having lost over $717 in interest, would only receive approximately $54 under the proposed terms.

This isn’t just a dispute over percentages; it’s about a systematic deception that preyed on the trust of hardworking Americans,” James concluded. “We will not stand by and allow Capital One to escape responsibility for its actions. We are fighting for every dollar that was stolen from these customers, and we will not rest until justice is served.” The case is ongoing, and the court’s decision on the settlement will likely set a precedent for similar financial fraud cases moving forward.

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