Capital One Will Pay $425 Million to Savings Customers
Capital One has reached a settlement over allegations that it cheated savings depositors out of higher interest rates.
The company will pay $425 million settlement to it faced nationwide litigation accusing it of falsely promising high interest rates on its 360 Savings accounts while offering much better rates to new customers on its 360 Performance Savings accounts.
Depositors with 360 Savings accounts only earned a fixed rate of 0.3 percent, while new 360 Performance Savings accounts earned rates of up to 4.35%. Currently, the 360 Performance Savings account has a rate of 3.60% and the 360 Savings account if offering only 0.50% in annual interest.
$300 million from the settlement amount will go toward reimbursing affected account holders for the lost interest. The other $125 million will be distributed to current 360 Savings account holders as additional interest. Further instructions for claiming compensation are expected to be sent to eligible customers, either by email or mail.
The Consumer Financial Protection Bureau similarly sued the bank early this year, arguing that Capital One cheated consumers out of more than $2 billion in interest payments. The case was later dropped.
