Capital One Settles Lawsuit Over Savings Account Rates for $425M
Capital One has agreed to pay $425 million to settle a nationwide lawsuit accusing it of cheating savings account depositors. The settlement, which requires a judge's approval, covers 360 Savings depositors since September 18, 2019. Notably, Capital One did not admit wrongdoing.
The settlement stems from a lawsuit filed by New York Attorney General Letitia James on Wednesday, on behalf of 360 Savings depositors in her state. The suit alleged that Capital One misled customers into believing they were earning market rates on their 360 Savings accounts, when in reality, they could have received higher rates on 360 Performance Savings accounts.
The agreement involves Capital One paying $300 million to cover interest lost by affected customers. An additional $125 million will be paid to depositors who still hold their 360 Savings accounts. The exact time period during which customers held their accounts is not specified.
This is not the first time Capital One has faced such allegations. The U.S. Consumer Financial Protection Bureau previously filed a similar lawsuit in 2016 but dropped it in February 2017.
Capital One, which expects to complete its takeover of Discover Financial Services on May 18, has agreed to this settlement without admitting wrongdoing. The agreement, if approved, will provide significant compensation to affected 360 Savings depositors.
