New York Attorney General Letitia James has initiated legal action against Capital One N.A. and Capital One Financial Corporation, accusing the financial institution of misleading its online savings account customers. The lawsuit claims that Capital One advertised its "360 Savings" accounts as high-interest options with superior rates compared to average savings accounts. However, it is alleged that as interest rates increased nationwide, Capital One kept the rates for its 360 Savings accounts artificially low.
The lawsuit further alleges that Capital One introduced a new product, "360 Performance Savings," which offered significantly higher interest rates than the existing 360 Savings accounts—at times more than 14 times higher. Despite this, the bank reportedly failed to inform 360 Savings customers about the opportunity to switch to these higher-earning accounts.
Attorney General James stated: “New York families work hard to save money for their futures, and they deserve every dollar of interest they are promised.” She added that Capital One assured high returns without any hidden conditions but then failed to deliver on those promises.
The complaint asserts that while promoting the 360 Performance Savings accounts to existing clients, Capital One did not adequately notify its 360 Savings customers about the new option. It also alleges that employees were instructed not to inform customers unless specifically asked.
Capital One eventually removed the 360 Savings from its website in favor of exclusively marketing the 360 Performance Savings. This move created what is described as a two-tier system where only new account holders received advertised high-interest rates.
According to Attorney General James, this conduct violates both state and federal laws by misleading consumers regarding their savings options and potential earnings. While a similar lawsuit by the Consumer Financial Protection Bureau was dropped earlier this year following leadership changes, Attorney General James aims to hold Capital One accountable through restitution and penalties for affected customers.
Assistant Attorney General Jason E. Meade is handling this case within New York's Consumer Frauds and Protection Bureau under Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine.