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The US Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against credit card Capital One and its parent company, Capital One Financial Corp.
The lawsuit accuses the bank of misleading millions of consumers and depriving them of more than $2bn in interest payments.
According to the CFPB, Capital One promoted its "360 Savings" account as offering one of the nation’s “best” and “highest” interest rates.
However, the bank allegedly froze the rate at a low level even as interest rates surged nationwide.
At the same time, Capital One introduced a nearly identical product, “360 Performance Savings”, which offered significantly higher interest — up to 14 times more than the 360 Savings account.
The lawsuit alleges that Capital One intentionally obscured the existence of the better-paying account from its 360 Savings customers, failing to notify them of the alternative.
This practice, according to the CFPB, resulted in substantial financial losses for millions of account holders.
The CFPB is seeking to halt Capital One’s allegedly unlawful practices, secure financial redress for affected consumers and impose civil penalties, with any penalties collected to be added to the CFPB’s victims relief fund.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB director Rohit Chopra.
“Banks should not be baiting people with promises they can’t live up to.”
