Capital One deceived certain customers out of millions in lawsuit

New York Attorney General Sues Capital One Over Frozen Interest Rates

New York Attorney General Letitia James has initiated legal action against Capital One, accusing the bank of freezing interest rates on its savings accounts.

The lawsuit, filed on Wednesday in the Southern District of New York, claims that the interest rates on a 360 savings account, which was promoted as having “one of the nation’s highest savings rates,” have been stagnant.

According to the complaint, Capital One locked in the interest rate at 0.3% back in 2002. In contrast, a different account—the 360 performance savings—was introduced in 2019 and boasted a higher interest rate, which even peaked at 4.35%, significantly higher than the first 360 savings account.

“Instead of helping customers enhance their savings through upgrades, Capital One kept newer products obscure,” the Attorney General’s Office stated.

“Families in New York are diligently saving for their futures, and they should receive every bit of interest promised,” James remarked. “Capital One assured a substantial return without a catch and then abruptly changed the terms, hoping no one would notice. Large banks shouldn’t deceive customers with false promises.”

In response, Capital One denied these allegations, asserting that the 360 performance savings accounts are openly advertised across the country and accessible to all customers. They noted that they operate multiple branches on Long Island.

“We will vigorously contest the claims made by the Attorney General and robustly defend ourselves in court,” Capital One announced in a statement.

James indicated that the bank had breached state and federal laws by misleading customers, accusing Capital One of concealing a more advantageous account.

“By doing this, Capital One established a hidden, two-tier savings system, benefiting only new accounts that enjoyed the advertised high interest rates,” the statement said. “New York customers have missed out on millions in interest compared to what they could have gained with 360 performance savings accounts, while Capital One retained the difference.”

The lawsuit seeks a court order to halt Capital One’s alleged fraudulent actions and to compel the bank to provide a list of New York customers with 360 savings accounts who may have missed out on interest by not switching to the higher-earning accounts.

The authorities are also aiming to impose financial compensation for customers and fines against Capital One for each violation of deceptive business practices.