Jan. 14 (UPI) — The U.S. Consumer Financial Protection Bureau on Tuesday announced a lawsuit alleging Capital One scammed billions of dollars off its customers in interest payments while it seeks to expand its own global enterprise.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” CFPB Director Rohit Chopra wrote Tuesday in a release.
The CFB contends that Capital One and its parent holding company cheated U.S. consumers out of more than $2 billion in interest payments on savings accounts by allegedly misleading about its 360 Savings accounts, and further obscured its higher-interest savings product from customers.
“Banks should not be baiting people with promises they can’t live up to,” added the outgoing director of the CFPB — the agency possibly on a federal chopping block after billionaire and Trump adviser Elon Musk said he wants to “delete” the Consumer Financial Protection Bureau designed to advocate for average American citizens.
Headquartered in McLean, Va., Capital One, N.A. is a national bank with more than $480 billion in assets and a wholly owned subsidiary of Capital One Financial Corp. offering multiple deposit account products, according to a notice.
According to the CFPB, Capital One allegedly promised that its flagship “360 Savings” account would provide one of the “best” and “highest” interest rates in the United States. However, the bank froze the interest rate at a low level while rates rose nationwide.
It’s alleged that Capital One misled about its “high interest” accounts. CFB officials say the credit giant “illegally deceived consumers” and allegedly violated the 1991 Truth in Savings Act by “representing that 360 Savings provided a variable interest rate” that was claimed to be the country’s top, best or
“highest” and would consistently earn more interest than an average savings account.
However, Capital One did not specifically notify 360 Savings accountholders about the new product, U.S. officials said.
The CFPB further alleged Capital One kept consumers in the dark to maintain a two-tier system. Officials added the credit company misrepresented to existing customers that its 360 Savings account was the singular 360 high-interest savings product with the features, terms, and conditions of 360 Savings.
Meanwhile, the American Economic Liberties Project urged U.S. officials to consider how Capital One is attempting to merge with its rival Discover in a more than $35 billion acquisition that could close as early as this year.
In addition, Capital One dubiously obscured from its customers newer, much-higher-interest 360 Performance Savings accounts which otherwise had the same terms or other conditions and features of its 360 Savings account.
“Even at its current size, the bank can’t obey the law,” AELP officials posted Tuesday on Bluesky in its urge to federal regulators overseeing the sale’s approval.
This was echoed last February by Sen. Josh Hawley, R-Miss., who said the the Discover-Capital One merger “should be blocked,” and suggested that Congress cap credit card rates “pronto.”
An ex-Missouri attorney general, the conservative GOP senator stated a possible merger “sounds like the credit card companies finding another way to screw the American people.”