This week, New York Attorney General Letitia James initiated a counter-lawsuit against Capital One Bank, accusing them of misleading Spanish-speaking customers and scamming thousands of English-speaking ones. The claim centers around a savings account that advertised high yields but delivered much lower interest rates than promised.
Capital One and Its Unfulfilled Promises
The lawsuit, submitted to the US District Court for the Southern District of New York (Case No. 25-04037), alleges that the bank promoted its 360 savings accounts with claims of offering “one of the best interest rates in the country.” However, while interest rates surged nationwide, Capital One maintained rates at a mere 0.30%.
Additionally, Attorney General James pointed out that when the bank introduced its 360 performance savings account in September 2019, it reached an impressive interest rate of 4.35%. Yet, they failed to inform their existing customers about this more lucrative option. The bank has allegedly instructed staff not to bring up new products unless customers specifically inquire about them.
“Capital One has exploited the trust of its customers, hoping they wouldn’t catch on to the deception,” explains the lawsuit filed by James’ office.
Capital One’s Denial of Allegations
In response to these accusations, Capital One, headquartered in McLean, Virginia, denied any wrongdoing and pledged to “vigorously defend” itself in court. The bank asserted that its 360 performance savings accounts are “always available to both new and existing customers, without the usual industry restrictions,” currently offering an annual yield of 3.6%.
Significantly, this legal action in New York follows a recent withdrawal of a similar lawsuit by the US Consumer Financial Protection Bureau (CFPB) at the end of February. This change is attributed to a shift in leadership within federal agencies after Donald Trump’s return to the presidency.
Attorney General James emphasized her intention to ensure that Capital One is held accountable, asserting that they mustn’t escape the consequences of their actions.
Parallel Challenges for the Bank
At the same time, Capital One wrapped up a nationwide class-action lawsuit last month, linked to its 360 savings accounts, although details of the settlement have not been disclosed.
While dealing with these new legal hurdles, Capital One is also working on finalizing its acquisition of Discover Financial Services, a deal valued at $35.3 billion, expected to close on May 18th.
