Attorney General James Sues Capital One Over Alleged Deceptive Savings Account Scheme

New York Attorney General Letitia James has filed a lawsuit against Capital One N.A. and Capital One Financial Corporation, accusing the banking giant of misleading its customers and shortchanging them millions in promised interest. According to the lawsuit, Capital One promoted its “360 Savings” accounts as “high-interest” savings products, yet quietly introduced a separate, nearly identical account—called “360 Performance Savings”—that offered much higher interest rates, all while keeping the original 360 Savings customers in the dark.

Beginning in 2019, Capital One rolled out the 360 Performance Savings accounts with significantly better interest rates, which grew to more than 14 times higher than those of the older accounts as market rates increased. While new customers were steered toward the higher-rate option, existing 360 Savings account holders—some of whom were earning as little as 0.3 percent—received no notification of the better option. Internal instructions allegedly even directed employees to withhold information about the newer product unless customers specifically inquired. By replacing all public-facing 360 Savings materials with those for the Performance account and maintaining two different rates for virtually identical products, the bank effectively created a hidden, two-tier system that benefited its own bottom line at the expense of its loyal customers.

“Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,” said Attorney General James. “Big banks are not allowed to cheat their customers with false advertising and misleading promises.”

The complaint alleges violations of both state and federal consumer protection laws, with the Attorney General seeking restitution, disgorgement of Capital One’s ill-gotten gains, and civil penalties. This lawsuit follows a similar complaint previously brought—and later dropped—by the Consumer Financial Protection Bureau. James emphasized that her office is stepping in to ensure Capital One is held accountable, even as federal oversight appears to have backed away. The lawsuit underscores the importance of transparency in financial services and highlights New York’s commitment to protecting consumers from deceptive banking practices.