Investing.com -- The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One (NYSE:COF), alleging the bank misled millions of consumers and deprived them of over $2 billion in interest payments on savings accounts.
The lawsuit accuses Capital One of deceptive practices involving its 360 Savings accounts.
According to the CFPB, Capital One promoted its 360 Savings accounts as offering some of the nation’s "best" and "highest" interest rates.
However, the bank allegedly froze these rates at a low level even as national interest rates climbed.
The CFPB added that at the same time, Capital One introduced a similar product, the 360 Performance Savings account, which offered significantly higher interest rates—at times, over 14 times more than the 360 Savings accounts.
The CFPB claims that Capital One deliberately obscured the new product from existing 360 Savings accountholders, preventing them from accessing higher returns.
“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.”
The lawsuit aims to halt Capital One’s alleged deceptive practices, provide redress to affected consumers, and impose civil penalties.
The CFPB asserts that Capital One’s actions violated the Truth in Savings Act and the Consumer Financial Protection Act, which prohibit unfair, deceptive, or abusive acts.