Capital One Financial Corporation has agreed to a $425 million payout to settle a nationwide class-action lawsuit brought by customers who claim they missed out on higher interest earnings. The case centers on Capital One’s 360 Savings and 360 Performance Savings accounts and whether the bank failed to adequately inform customers about better available rates.
Filed in the U.S. District Court for the Eastern District of Virginia, the settlement is still awaiting judicial approval. While the bank has not admitted wrongdoing, it agreed to compensate eligible account holders for lost interest and make supplemental payments to certain customers.
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Why This Settlement Matters for Consumers and the Banking Industry
Interest Rates, Transparency, and Growing Consumer Awareness
Since 2022, rising interest rates have made consumers increasingly attentive to how much banks pay them on savings deposits. This case highlights a broader issue of transparency in the financial sector and growing public scrutiny of banks’ advertising and product disclosures.
Capital One, like many financial institutions, has had to respond to evolving consumer expectations in an environment where the Federal Reserve’s rate hikes have made savings rates a competitive differentiator.
Who Qualifies for a Payout from the Capital One Settlement?
Eligibility Criteria for Account Holders
You may be eligible for compensation if you:
- Held a 360 Savings account with Capital One anytime from September 18, 2019, through the present.
- This includes former customers who have closed their accounts and those who switched to a 360 Performance Savings account during that time.
Customers who never had a 360 Savings account are not included, nor are individuals with only 360 Performance Savings or other Capital One accounts.
How the $425 Million Settlement Will Be Distributed
Breakdown of the Compensation Structure
The settlement includes:
- $300 million to be divided among all eligible customers, based on how much interest they would have earned had their 360 Savings account matched the 360 Performance Savings rate during the covered period.
- An additional $125 million allocated specifically for customers still holding 360 Savings accounts, with requirements that Capital One maintains interest rates at least double the national average for these account holders.
How Payment Amounts Are Calculated
The amount each person receives will depend on:
- How long they held a 360 Savings account
- Their average balance during that time
- The difference in interest between their actual rate and the 360 Performance rate (which reached as high as 4.35% versus a fixed 0.3%)
Even customers who closed their accounts or moved to Performance Savings can still receive a prorated payment.
Why the Lawsuit Was Filed: A Closer Look at the Allegations
Did Capital One Mislead Its Customers?
The lawsuit claims Capital One marketed its 360 Savings account as competitive, while failing to adequately notify or encourage customers to switch to its higher-yielding 360 Performance Savings product.
At the time, Performance Savings offered returns that far outpaced the older product. Plaintiffs argued that the rate gap was significant, especially after the Fed raised interest rates starting in 2022. This alleged omission deprived long-term account holders of potentially thousands in earnings.
What Happens Next? Timeline and Legal Process
Court Approval, Legal Fees, and Notifications
- The proposed settlement is subject to final approval by a judge, with a preliminary hearing scheduled by June 6, 2025.
- Legal fees for the class-action attorneys will come out of the $425 million total fund.
- Once the settlement is finalized, notifications will be sent to eligible customers explaining how to claim their payment and when funds will be disbursed.
Financial Experts and Regulators Weigh In
Letitia James, New York Attorney General:
“Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice.”
Alex Beene, Financial Literacy Instructor:
“Savers are more sensitive to rates now. Banks using bait-and-switch strategies risk serious backlash, and this case proves it.”
Kevin Thompson, CEO of 9i Capital Group:
“This is exactly why the Consumer Financial Protection Bureau exists. This is a classic case of banks profiting from customers’ lack of awareness.”
Drew Powers, Financial Advisor:
“The average customer will only see a fraction of what they should’ve earned. It’s a warning: never assume your bank has your best interests at heart.”
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Final Thoughts: What Savers Should Learn From This Case
This settlement serves as a cautionary tale for both financial institutions and depositors. For banks, it’s a reminder that transparency and fairness matter in product marketing. For consumers, it reinforces the importance of regularly reviewing account terms, comparing rates, and staying informed about new offerings.
If you were a Capital One 360 Savings customer at any point since September 2019, you could be owed a payout. Watch for settlement updates and don’t miss your chance to claim what you’re entitled to.