The bank misled online savings customers and cost them billions
- New Yorks attorney general leads coalition opposing Capital One class action settlement
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Officials say deal would return pennies on the dollar while letting the bank keep $2 billion
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Settlement criticized for failing to stop deceptive practices in savings accounts
New York Attorney General Letitia James is leading a bipartisan coalition of 17 other state attorneys general in opposing a proposed class action settlement with Capital One, arguing it would cheat customers out of billions in unpaid interest and shield the bank from accountability.
James sued Capital One in May, alleging the bank misled online savings customers by keeping interest rates on its 360 Savings accounts artificially low while advertising them as high interest products. As rates rose nationwide in 2022, Capital One instead created nearly identical 360 Performance Savings accounts that paid far higher yields at one point more than 14 times higher while continuing to underpay 360 Savings customers.
Critics: Settlement favors Capital One
In an amicus brief filed Tuesday, James and her counterparts said the proposed settlement in a separate class action case shortchanges consumers and benefits Capital One at their expense. The deal would deliver $125 million in extra interest to current 360 Savings customers, but the coalition argues that is a fraction of what they are owed.
By comparison, the attorneys general say Capital One has withheld more than $2 billion in interest. The average consumer lost out on about $717 but would receive less than $54 under the settlement.
Capital One customers worked hard for their savings, only to be misled and cheated out of billions of dollars, James said. Now, Capital One is pushing a settlement agreement that would let it off the hook. We are opposing this unfair settlement so we can truly hold Capital One accountable.
Great heres a sidebar/graphic explainer you could run alongside the main story:
What Capital One customers lost vs. what the settlement pays
Unpaid interest at stake:
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More than $2 billion in interest Capital One allegedly withheld from 360 Savings customers
Average customer loss:
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About $717 in missed interest
Settlement payout:
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$125 million total in additional interest
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Less than $54 per customer on average
Comparison:
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In the time it would take to pay out $125 million, Capital One would have owed $800 million at its higher 360 Performance Savings rate
Key criticism:
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Settlement does not require Capital One to raise 360 Savings rates, meaning underpayments could continue
Push for stronger restitution
The attorneys general also criticized the deal for failing to require Capital One to stop paying 360 Savings customers below-market rates while continuing to market the accounts as high-interest. Without structural changes, they warned, the scheme at the center of both lawsuits would persist.
Capital One has argued the settlement should prevent James office from pursuing its separate enforcement case. The coalition urged the court to reject both the settlement and any attempt to use it to block state-level restitution efforts.
Attorneys general from California, Illinois, Massachusetts, Ohio and 13 other states joined James in filing the brief.
Posted: 2025-09-24 18:38:44