Capital One Agrees to $425 Million Settlement Over Misleading Savings Account Rates

What's Happening?

Capital One has agreed to a $425 million settlement in a class action lawsuit concerning its 360 Savings account. The lawsuit, filed in a federal court in Alexandria, Virginia, alleged that Capital One misled customers by marketing the 360 Savings account as a high-interest option while freezing its interest rate at a low level. This occurred despite rising national rates, leading to significant lost interest for account holders. The Consumer Financial Protection Bureau (CFPB) had also sued Capital One earlier this year, accusing the bank of causing over $2 billion in lost interest payments. Although the CFPB dropped its lawsuit in February, the class action settlement remains. Customers who held a Capital One 360 Savings account between September 18, 2019, and June 16, 2025, are eligible for compensation.

Why It's Important?

This settlement is significant as it addresses the financial impact on thousands of Capital One customers who were potentially misled about their savings account's interest rates. The case highlights the importance of transparency in financial services and the role of regulatory bodies like the CFPB in protecting consumer rights. The settlement could lead to increased scrutiny of banking practices and encourage other financial institutions to ensure clear communication about their products. For affected customers, the settlement offers a chance to recover some of the lost interest, potentially restoring trust in the banking system.

What's Next?

The settlement is pending court approval, with a hearing scheduled for November 6. Customers eligible for compensation must submit claims or objections by October 2. If approved, the settlement will provide payments to account holders based on the interest they would have earned if their accounts had been subject to the higher rates of the 360 Performance Savings account. Additionally, current account holders will receive an interest rate at least twice the national average, as calculated by the FDIC. This case may prompt further regulatory actions or reforms in the banking sector to prevent similar issues in the future.