Capital One to Pay $425 Million in Class Action Settlement Over Alleged Misleading Advertising

Capital One has agreed to pay $425 million in a class action lawsuit settlement. Eligible customers are those who maintained a Capital One 360 Savings account between Sept. 2019 and June 2025. Payments will be based on what customers would have earned if their accounts had paid the interest rate applicable to the 360 Performance Savings account. The settlement awaits court approval with a hearing scheduled for Nov. 6 and a claim submission deadline of Oct. 2.

Capital One has agreed to pay $425 million in a class action lawsuit settlement, resolving allegations that the bank failed to raise interest rates on its 360 Savings accounts. The settlement, which awaits court approval with a hearing scheduled for November 6, benefits customers who maintained a Capital One 360 Savings account between September 18, 2019, and June 16, 2025 [2].

The settlement, which is subject to court approval, includes $125 million in additional interest payments. These payments will be distributed to eligible class members who maintained their 360 Savings accounts. The remaining $300 million will be allocated based on the amount of interest customers would have earned if their accounts had paid the higher interest rate applicable to the 360 Performance Savings accounts [2].

The class action lawsuit, titled In re: Capital One 360 Savings Account Interest Rate Litigation, was filed by the Consumer Financial Protection Bureau (CFPB) in January 2025. The CFPB accused Capital One of violating the Truth in Savings Act and engaging in deceptive practices by failing to inform existing 360 Savings account holders of the higher-yielding 360 Performance Savings account [1].

The settlement underscores the importance of transparency and compliance in digital banking. It also highlights the regulatory risks and consumer trust challenges that digital banks face. For instance, the settlement comes at a time when consumer trust in digital banking remains fragile, with only 34% of consumers trusting organizations to use their data "sensibly" [1].

Capital One's settlement also has implications for shareholder value. While the company's strong capital ratios and 4.5% dividend offer short-term stability, the settlement highlights the cost of regulatory missteps. The bank's stock price has been volatile in 2025, with the 360 Savings settlement and ongoing litigation contributing to the volatility [1].

For investors, the Capital One case illustrates the importance of evaluating regulatory risk, consumer trust, and shareholder value. It also underscores the need for proactive compliance and transparent governance in the digital banking sector.

References:

[1] https://www.ainvest.com/news/capital-425m-class-action-settlement-implications-consumer-banking-shareholder-2508/
[2] https://topclassactions.com/lawsuit-settlements/open-lawsuit-settlements/425m-capital-one-360-savings-account-class-action-settlement/