Capital One Cheated Savers Out of $2B — Now Pays $425M

Capital One Financial Corporation and Capital One, N.A. agreed to pay $425 million to settle a class action lawsuit alleging the bank ran a bait-and-switch on millions of savings account customers, marketing the 360 Savings account as a high-yield product while secretly freezing its rate at rock bottom and steering new customers toward a separate, higher-earning account the bank kept hidden from existing depositors. The scheme, plaintiffs alleged, cost 360 Savings account holders more than $2 billion in lost interest over six years.

U.S. District Judge David J. Novak of the Eastern District of Virginia granted final approval of the settlement on April 20, 2026. The case, In re: Capital One 360 Savings Account Interest Rate Litigation, Case No. 1:24-md-03111-DJN, is now resolved. Payments are expected to go out automatically around July 27, 2026, provided no appeals are filed. No claims form is required.

Capital One 360 Savings Lawsuit Timeline and Updates

2012 — Capital One Acquires ING Direct, Inherits 360 Savings Customers

The origins of this case trace back to Capital One’s 2012 acquisition of ING Direct, the online bank known for its high-yield savings products. ING Direct customers were converted into Capital One 360 Savings account holders. The account maintained a reputation for competitive interest rates in the years that followed, and Capital One continued to market it as a top-tier savings option.

February 2019 — Capital One Launches 360 Performance Savings

In February 2019, Capital One quietly introduced a new product: the 360 Performance Savings account. The new account was virtually identical to the existing 360 Savings account in every respect except one: it paid a significantly higher interest rate. The 360 Performance Savings launched at 1.9% APY. Existing 360 Savings account holders were earning just 1.0% APY at the same time.

Capital One did not convert existing 360 Savings customers to the new account. It did not notify them that a higher-earning product existed. It removed all references to the original 360 Savings account from its website and stopped offering it to new customers. From that point forward, the two accounts existed side by side in Capital One’s system, with new customers getting the higher-rate version and legacy customers staying in the lower-rate product, unaware the difference existed.

September 18, 2019 — Class Period Begins

The class period in the litigation officially begins on September 18, 2019, the date the court identified as when Capital One’s conduct became actionable under the claims asserted. From this date forward, the divergence between the two accounts’ interest rates was active and ongoing, and existing 360 Savings customers were earning less than they would have in the new product.

2020 — Pandemic Rate Cuts Widen the Gap

When COVID-19 triggered a collapse in interest rates nationwide in 2020, Capital One dropped the 360 Savings rate to 0.30% APY. The 360 Performance Savings account fell too, but only to 0.40% APY. The gap was small in absolute terms, but the pattern was already set: existing customers consistently earned less than new ones, in an account with an almost identical name and identical terms.

2022 — Federal Reserve Rate Hikes Expose the Full Disparity

The Federal Reserve began a historic series of interest rate increases in 2022, raising the federal funds rate from near zero to over 5% by mid-2023. The 360 Performance Savings account followed rates upward, eventually reaching 4.35% APY by mid-2024. The legacy 360 Savings account remained frozen at 0.30% APY. At its peak, the spread between the two accounts reached more than 14 times the difference. Millions of existing customers were earning 0.30% while new customers in what was functionally the same bank, the same institution, often the same marketing materials, earned over 4%.

This is where the $2 billion figure comes from. A Special Master appointed by the court later calculated the cumulative interest loss to 360 Savings account holders during the class period, comparing what they actually earned to what they would have earned in the 360 Performance Savings account. The discrepancy ran into the billions.

2024 — Class Action Filed in Virginia Federal Court

Multiple lawsuits were filed on behalf of 360 Savings account holders in 2024 and consolidated into a multidistrict litigation in the U.S. District Court for the Eastern District of Virginia, where Capital One is headquartered. The consolidated case was assigned Case No. 1:24-md-03111-DJN under Judge David J. Novak. Wolf Popper LLP was appointed Lead Counsel and Class Counsel for plaintiffs.

January 14, 2025 — CFPB Sues Capital One Over the Same Conduct

In the final days of the Biden administration, the Consumer Financial Protection Bureau filed a separate enforcement action against Capital One, N.A. and Capital One Financial Corp. in the same Virginia federal court. The CFPB alleged that Capital One had marketed the 360 Savings account as offering one of the nation’s “best” and “highest” interest rates, and had then frozen the rate while creating a higher-yield alternative it actively hid from existing customers. The Bureau accused Capital One of forbidding employees from proactively telling 360 Savings holders about the 360 Performance Savings product. The CFPB sought to recover the full $2 billion in lost interest on behalf of consumers.

February 27, 2025 — CFPB Drops Its Lawsuit Under Trump Administration

Following President Trump’s return to the White House and the subsequent restructuring of CFPB leadership, the Bureau voluntarily dismissed its lawsuit against Capital One with prejudice on February 27, 2025. The court ordered the case closed the same day. The dismissal left consumers relying entirely on the private class action to recover their losses. New York Attorney General Letitia James, who had been tracking the case, announced a parallel state lawsuit in Manhattan federal court carrying the same interest-rate deception allegations. The New York OAG’s lawsuit ultimately agreed to be voluntarily dismissed upon final approval of the class action settlement.

June 2025 — First Settlement Proposed; Attorneys General Oppose It

An initial settlement was proposed in mid-2025. A coalition of 18 state attorneys general, led by New York AG James, filed an amicus brief opposing the deal, calling it inadequate. The attorneys general argued the proposed amount fell far short of compensating class members for the full scope of their losses, and that the settlement failed to adequately address Capital One’s ongoing conduct.

November 2025 — Judge Rejects Initial Settlement as Insufficient

Judge Novak rejected the first proposed settlement in November 2025. His ruling stated that the payout did not fairly compensate account holders and accused the bank of continuing to deceive depositors. That rejection sent the parties back to negotiate a larger deal. It also signaled that the court was paying close attention to the adequacy of relief, not simply rubber-stamping a settlement because the parties agreed to it.

January 23, 2026 — Special Master Issues Loss Calculation Report

A court-appointed Special Master issued a report on January 23, 2026, calculating the historical interest loss amounts resulting from Capital One’s alleged conduct and assessing the percentage of those losses addressed by the proposed $425 million settlement. The report also estimated the long-term value to the class from the interest-rate matching requirement imposed on Capital One going forward. The publicly available version of the report was made available on the settlement website.

April 20, 2026 — Judge Grants Final Approval of $425 Million Settlement

Judge Novak granted final approval of the revised $425 million settlement on April 20, 2026. The settlement was described by Wolf Popper LLP, the court-appointed lead counsel, as providing expected total relief of over $1.2 billion to the settlement class when accounting for both the cash fund and the forward-looking interest-rate matching requirement. Capital One denied all wrongdoing as part of the agreement.

What the Lawsuit Alleged

The core allegation is deliberate consumer deception through product architecture. Capital One created two savings accounts that were essentially identical in name, terms, and marketing — except one paid a fraction of the interest of the other. Existing customers were placed in the lower-rate product and kept there through a deliberate strategy of non-disclosure.

The complaint alleged Capital One took active steps to maintain the information gap. The bank removed all references to the original 360 Savings account from its website, replacing them with information about the new product. It did not send notices to existing 360 Savings holders explaining that a higher-rate alternative existed. It excluded existing 360 Savings holders from advertising campaigns that promoted the higher-rate 360 Performance Savings to other Capital One customers who did not already have the old account. And, according to the CFPB’s complaint before it was dropped, the bank instructed employees not to proactively mention the better-rate product to holders of the old account.

The result was a two-tier system: informed new customers earning over 4%, uninformed legacy customers frozen at 0.30%, with the bank benefiting from the difference.

Who Qualifies for a Settlement Payment

Any person or entity that held a Capital One 360 Savings account at any time between September 18, 2019 and June 16, 2025 is a class member. Joint and co-holders of qualifying accounts are included. Customers who held only a 360 Performance Savings account are not included in the class.

No claim form is required. Capital One will distribute payments automatically using its own account records. Payments of $5 or more will go out by check to the class member’s last known address, or by electronic payment if the class member selected that option by the March 30, 2026 deadline.

How Much Will You Receive?

Individual payout amounts depend on three factors: how long you held the account during the class period, how much money you kept in the account, and the total number of eligible class members among whom the $300 million back-interest pool is divided. The formula applies the difference between what your account actually earned and what it would have earned in the 360 Performance Savings account during the same period.

A customer who held a large balance in the account for most of the class period, particularly during the 2022 to 2025 stretch when the rate gap was widest, could receive a substantially larger payment. A customer who held a modest balance for a short period during the class window will receive a proportionally smaller amount. No floor has been set below the $5 minimum payment threshold.

Customers who kept their 360 Savings accounts open will also benefit from the forward-looking component: Capital One must now match 360 Savings interest rates to 360 Performance Savings rates. New York AG James estimated this rate-matching requirement would deliver an additional $530 million to consumers nationwide over time, beyond the $425 million cash settlement.

The CFPB Lawsuit and Its Dismissal

The Consumer Financial Protection Bureau’s January 2025 lawsuit brought the case to national attention and provided the most detailed public account of Capital One’s alleged conduct. The CFPB described a systematic effort to keep existing customers in the dark: removing the old account from the website, barring employees from proactively disclosing the higher-rate alternative, and running advertising campaigns for the new product that deliberately excluded current 360 Savings holders from the audience.

The agency called Capital One’s marketing of the 360 Savings account as “one of the nation’s best” interest rates “false or otherwise misleading.” CFPB Director Rohit Chopra stated at the time: “Banks should not be baiting people with promises they can’t live up to.”

The Trump administration’s CFPB leadership dismissed the lawsuit on February 27, 2025. That dismissal — one of dozens of enforcement actions dropped in the first weeks of the new administration — removed federal regulatory pressure from Capital One entirely. The private class action was left as the sole remaining avenue for consumer recovery. The result was the $425 million settlement that followed. Whether the settlement would have been larger had the CFPB lawsuit remained active is a question the dismissal forecloses.

Capital One’s Position

Capital One has denied all allegations of wrongdoing throughout the litigation. The settlement agreement states that the court did not determine that Capital One did anything wrong. The parties chose to resolve the dispute to avoid continued litigation, as is standard in class action settlements of this type. Capital One did not admit liability, did not acknowledge that the two accounts were designed to deceive customers, and did not confirm that its employees were instructed to withhold information about the higher-rate product.

What This Lawsuit Teaches Consumers

The Capital One 360 Savings case is a textbook example of product architecture used as a deception tool. The scheme did not require false advertising in the traditional sense. Capital One did not lie about the 360 Savings rate. It simply stopped telling customers that a better product existed, gave the new product a nearly identical name, and relied on consumer inertia to keep millions of people earning a fraction of what they could have been earning. That kind of quiet omission is harder to detect than an outright lie — and, this case established, just as legally actionable.

The pattern repeats in banking with regularity. When interest rates rise, banks pass the benefit to new customers to attract deposits while quietly leaving existing customers at older, lower rates. Most consumers never notice. They see their balance growing by a few cents monthly and assume the account is still performing well. The Capital One case is a reminder that “high yield” is a relative term. A product that was genuinely competitive in 2012 may be an underperformer by 2022, even if its name, marketing, and terms look identical.

The practical lesson is simple: check your savings account rate at least once a year. Compare it to what the same bank is offering to new customers. If the bank has introduced a newer product with a similar name and higher rate, ask to be moved. Banks are not obligated to volunteer that information. As this case proved, some actively work to prevent you from finding out. That changed nothing about depositors’ legal rights — but it cost them six years and required a class action to fix. For related coverage of financial deception, see our reporting on the Celsius Network fraud case and the Capital One Offers cashback rewards lawsuit.