New York Attorney General Sues Capital One for Allegedly Cheating Customers Out of Millions
The logo for consumer lending firm Capital One Financial Corp is seen on its headquarters on January 20, 2023 in McLean, Virginia. The company has reportedly eliminated up to 1,100 technology positions this week as its digital structure matures.
New York Attorney General Letitia James has filed a lawsuit against Capital One, accusing the bank of deceiving customers and depriving them of millions of dollars in interest payments. The lawsuit comes just months after a similar case against the financial institution was dropped by the Consumer Financial Protection Bureau.
According to the complaint filed in Manhattan federal court, Capital One allegedly marketed its “360 Savings” account as a high-yield savings option, while quietly introducing a new product called “360 Performance Savings” with significantly higher interest rates. As interest rates increased in 2022, Capital One froze the interest rate of the 360 Savings account at 0.3%, while offering rates as high as 4.35% on the 360 Performance Savings accounts, resulting in substantial losses for New York customers.
The lawsuit also claims that Capital One instructed its employees not to inform 360 Savings customers about the new product unless specifically asked. This behavior mirrors the allegations made in the dropped CFPB case, which stated that Capital One’s marketing tactics caused customers to miss out on over $2 billion in interest.
New York Attorney General Letitia James criticized Capital One’s actions, stating, “Big banks are not allowed to cheat their customers with false advertising and misleading promises.” Capital One, on the other hand, vehemently denies the allegations and intends to defend itself vigorously in court.
The lawsuit seeks “restitution and damages for all affected Capital One customers” and accuses the bank of violating state and federal laws. Capital One maintains that its flagship 360 Performance Savings product was widely marketed and easily accessible to all customers without any restrictions.
