Capital One Settles Lawsuit for $425 Million

Capital One has agreed to pay $425 million to resolve a lawsuit claiming it misled a large number of customers about high-yield savings accounts that turned out to offer lower interest rates than promised.

The $152 billion financial institution reached this settlement with the office of New York Attorney General Letitia James.

Last week, a federal judge in Virginia approved a preliminary agreement between Capital One and James’ office.

Back in 2019, the bank introduced a two-track savings strategy featuring the “360 Performance Savings” account, which was marketed as having much higher interest rates.

However, they continued to promote their older 360 Savings accounts as high-yield options, even though those accounts sometimes paid interest rates that were over 14 times lower than their newer counterparts.

In the lawsuit, James alleged that Capital One kept interest rates on the 360 Savings accounts artificially low despite advertising them as offering higher yields.

For example, the interest rate for the 2022 360 Savings plan was reported at just 0.3%, significantly below the average market rate at that time.

Most customers eligible for the settlement will receive a payment automatically determined by how long they had their 360 Savings account and how much money they kept in it. Some might actually receive slightly more.

Customers who closed their 360 Savings accounts or switched to the 360 Performance Savings accounts before October 2 last year are likely to see payments that are approximately 15% higher compared to those who left their accounts untouched.

Anyone who had a Capital One 360 Savings account at any point between September 18, 2019, and June 16, 2025, qualifies for the settlement.

No claim form is necessary. Payments of $5 or more will be sent automatically via check or electronically, depending on the selection made earlier.

A final court hearing is set for April, during which the judge will give the final approval for the settlement and determine when the payments will be released.