New York Sues Capital One for Allegedly Misleading Savings Account Holders
- May 31
- 2 min read
15 May 2025
NEW YORK - New York Attorney General Letitia James has filed a federal lawsuit against Capital One Financial Corporation, accusing the bank of systematically deceiving its savings account customers for several years. The suit, filed in the U.S. District Court for the Southern District of New York, claims that Capital One misled depositors by promoting "high-yield" interest rates on its 360 Savings accounts while actually offering significantly lower returns.
According to the Attorney General’s office, Capital One lured customers with promises of competitive interest rates but then locked many into accounts that paid as little as 0.30%, far below national averages, especially as interest rates rose in recent years. The bank allegedly failed to notify customers about the availability of better options, such as the 360 Performance Savings account introduced in September 2019, which offered interest rates as high as 4.35%.
The lawsuit asserts that Capital One deliberately concealed the new, higher-interest account from its existing customers. Internal instructions reportedly advised bank staff to only discuss the higher-yielding option if customers explicitly asked about it. As a result, many long-time savers missed out on thousands of dollars in potential earnings.
"This was a deliberate move to maximize profits by keeping loyal customers in the dark," said Attorney General James. "Capital One marketed itself as a customer-first bank, but in reality, they manipulated account structures to quietly reduce returns while promoting transparency."
The complaint seeks financial restitution for affected customers, as well as civil penalties against the bank for engaging in deceptive and unfair business practices.
This isn’t the first time Capital One has faced legal scrutiny over its savings account practices. Earlier this year, the Consumer Financial Protection Bureau (CFPB) filed a similar complaint but later dropped the case following changes in leadership at the agency. However, Capital One agreed to a $425 million nationwide settlement to resolve related class-action claims from consumers who argued they were misled by the bank’s promotional tactics.
A spokesperson for Capital One responded to the lawsuit by stating the bank "acted in accordance with all applicable laws" and "provided transparent options for all customers." The company did not comment on the specifics of the litigation but confirmed it would defend itself vigorously in court.
The case, New York v. Capital One NA et al, case number 25-04037, could set a precedent for how banks disclose product changes and communicate better options to their account holders. Legal experts say this may push other financial institutions to proactively notify customers about higher-interest products rather than quietly introducing them.
As the case unfolds, customers and regulators alike will be closely watching to see if this could signal a broader crackdown on opaque banking practices across the U.S.
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