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

Capital One Financial Corp. has agreed to a $425 million settlement to conclude a class action lawsuit regarding the marketing and interest rates of its 360 Savings accounts. This legal resolution addresses claims that the company misled its customers by maintaining low interest rates on these accounts despite introducing a higher-yielding product, the 360 Performance Savings account. Customers who held a Capital One 360 Savings account between September 18, 2019, and June 16, 2025, may be eligible to receive payments from the settlement.

The case, currently awaiting final approval from the U.S. District Court in Alexandria, Virginia, roots in accusations that Capital One misrepresented its 360 Savings account as a high-interest, variable-rate account, suggesting it was "one of the nation’s best" savings options. However, the bank allegedly did not inform account holders about the newer 360 Performance Savings account, which benefited from increases in national interest rates, thereby depriving the accountholders of significant potential earnings.

Capital One has agreed to compensate customers for the differential in interest they would have earned had their accounts been switched to the 360 Performance Savings rate during the covered period. The settlement allocates $300 million for one-time pro rata payments reflecting this differential. In addition, $125 million is allotted for ongoing interest payments to those who maintain their 360 Savings accounts. Capital One will ensure that these accounts earn an interest rate at least twice the national average for savings deposit accounts, as determined by the FDIC.

The lawsuit follows action by the Consumer Financial Protection Bureau (CFPB), which separately sued Capital One earlier this year, suggesting that the bank's practices led to over $2 billion in lost interest payments for customers. While the CFPB dropped its lawsuit in February, the class action persisted, culminating in this settlement.

The timeline for filing claims or objections to the settlement concludes on October 2, 2025, with no claim form required, as eligible class members will automatically receive payments unless they opt-out. A hearing for final court approval is scheduled for November 6, 2025.

The case offers insights into larger issues in digital banking, touching on consumer trust, regulatory scrutiny, and implications for shareholder value. For Capital One, the resolution of this case is an opportunity to rebuild customer trust and demonstrate regulatory compliance, especially in light of its forthcoming acquisition of Discover Financial Services and the associated strategic efforts to integrate and enhance its market offerings.

Capital One’s handling of this settlement underscores the necessity for transparency in marketing and regulatory adherence, especially in the fast-evolving digital banking landscape. The bank aims to mitigate reputational damage and operational risks while navigating these challenges to maintain its position in a competitive sector. As digital banking continues to grow, institutions like Capital One must balance innovation with accountability to ensure both profitability and consumer trust.