Capital One has agreed to a $425 million settlement to resolve a class-action lawsuit, according to federal court filings reviewed by The New York Times. Customers who held a 360 Savings account since September 2019 could be eligible for direct payments.
Why Capital One is Paying $425 Million
In September 2019, Capital One launched the 360 Performance Savings account. At that time, the bank was offering its older 360 Savings account. The lawsuit stems from the failure to notify or encourage customers to switch from the 360 Savings account to the new 360 Performance Savings account, which had significantly higher interest rates of up to 4.35%, compared to the old one that offered only 0.3%.
According to the plaintiffs, Capital One’s failure to communicate to its customers caused them to lose out on substantial interest income, especially as the Federal Reserve raised rates beginning in 2022. Capital One denied any wrongdoing, but it agreed to a settlement worth $425 million that will be distributed among all the affected account holders. This deal was filed in federal court in Alexandria, Virginia, and is awaiting final approval by a judge in June 2025.
Who is Eligible for Capital One Settlement Payments?
You only qualify for this settlement payment if;
- You held a Capital One Savings account at any point from September 18, 2019, to the present, even if the account is now closed.
Note that the settlement does not apply to those who only held a 360 Performance Savings account or any other Capital One accounts.
How Much You Could Get
The $425 million Capital One Settlement will be divided into two main categories:
- $300 million- This amount will be paid to all qualifying 360 Savings account holders. It will reimburse them for the interest they would have learned if they had switched to the Performance Savings account. The exact amount each individual receives will depend on the money they have saved in their accounts and how long the account has been open during the eligible period.
- $125 million- This amount will go to customers who still have an active 360 Savings account and they will receive additional interest payments based on the duration and balance of their accounts.
The payouts will not be the same for every customer, and the more you have deposited and the longer you have had a 360 Savings account, the more money you could receive.
When Will Payments Arrive?
The payment timeline will be determined after the court has reviewed and approved the settlement in June 2025. After that, a settlement administrator will contact all eligible customers with details on:
- How much you receive.
- The payment method (direct deposit or mailed check).
No action is needed until the Court issues further instructions through the settlement administrator. Plaintiffs’ counsel will apply to the Court for payment of attorneys’ fees and expenses out of the settlement fund.
Capital One’s Response
Capital One emphasized that the 360 Performance Savings account was marketed widely, including on national television, and was available to the public. The bank also said that it was available in just minutes to all new and existing customers without any industry restrictions.
The company has not admitted to any wrongdoing as part of the settlement. Meanwhile, it has finalized its acquisition of Discover, forming the largest credit card issuer in the U.S.
Why This Matter is of Concern
This lawsuit emphasizes growing frustration among customers due to deceptive banking practices, especially in a high-interest rate environment. Due to increasing interest rates, banks faced pressure to offer their customers more attractive yields on deposits, but some banks avoided this and continued to pay outdated rates to long-time customers, which is unfair. Capital One is accused of doing so, and many experts condemned the act.
Letitia James, the New York Attorney General, added: “Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice.”
Conclusion
Capital One has agreed to a $425 million settlement to resolve a class-action lawsuit accusing it of deceiving holders of its savings account despite not admitting to any wrongdoing on its part. Meanwhile, the affected customers must wait until June 2025, when a judge will review the settlement claim.