Capital One Pays $425M for Misleading Savings Rates

Capital One will pay $425 million to settle a class-action lawsuit alleging it misled customers about interest rates on its savings accounts. The lawsuit claimed Capital One kept customers in low-yield 360 Savings accounts (offering as low as 0.3% annual interest) while simultaneously offering significantly higher rates (up to 4.35%) in its newer 360 Performance Savings accounts. The bank allegedly failed to clearly inform customers about the option to switch to the higher-yielding accounts. This settlement comes shortly after Capital One's $35.3 billion acquisition of Discover Financial Services.

The settlement includes $300 million to reimburse affected account holders for lost interest and $125 million as additional interest for current 360 Savings account holders. Eligibility extends to individuals who held a Capital One 360 Savings account between September 18, 2019, and the present and did not switch to the higher-yield account. Capital One has not admitted wrongdoing.

Affected customers will receive further instructions on claiming compensation via email, mail, or a dedicated claims website. The settlement highlights the importance of regularly reviewing financial accounts to ensure customers are receiving competitive interest rates. Banks often offer newer products with better terms, but don't always make it easy for existing customers to transition. This case serves as a cautionary tale for consumers to proactively monitor their accounts and seek out better options when available. The current interest rates are 3.60% for the 360 Performance Savings account and 0.50% for the 360 Savings account.

(Source: https://dannydealguru.com/capital-one-savings-account-425-million-settlement/)