Within the next few days, all identified class members who could benefit from a Capital One-related settlement should receive notices. Those who believe they may be a class member can read more here.
According to the settlement website, people who were Capital One 360 Savings account holders from Sept. 18, 2019 through June 16 of this year are eligible for benefits from the $425 million settlement. However, the site also noted that “the court in charge of this case still has to decide whether to approve the settlement.”
Documents provided by Wolf Popper law firm, representing the class members, show that the class action suit was filed last summer. This June, Judge David J. Novak of the United States District Court for the Eastern District of Virginia granted preliminary approval of a settlement, Wolf Popper said.
According to the law firm, the lawsuit alleges that Capital One “acted deceptively regarding the marketing and payment of interest on its 360 Savings account product,” in part by creating a new, similarly named product. The allegation has roots going back to the 2010s. Capital One introduced its “360 Savings” account in 2013.
Earlier this year, Audacy reported that the Consumer Finance Protection Bureau filed a lawsuit over the same issue shortly before President Donald Trump took office. It said that when Capital One acquired online bank ING Direct USA in 2012, it also acquired its online savings product called “ING Direct,” known for having higher-than-average interest rates and that the “360 Savings” accounts launched in 2013 were in fact a rebranding of this product. These accounts were still marketed as “high interest” accounts, said the CFPB.
However, the bureau said that Capital One froze the “360 Savings” accounts in 2019 with an interest rate of 0.30%. Around the same time, it also launched similarly named “360 Performance Savings” accounts that the CFPB said pay out significantly more interest.
“We strongly disagree with their claims and will vigorously defend ourselves in court,” said a Capital One spokesperson regarding the bureau’s claims, according to an Axios report.
This week, USA Today noted in a report that the CFPB dropped its lawsuit in February, after Trump took office.
“But, Capital One has agreed to pay $425 million in a separate class action lawsuit settlement,” said the report.
Per the settlement filed this May, Capital One would generate a class list with those eligible for benefits from the settlement. Wolf Popper said that: “Since Capital One did nothing to advise its legacy accountholders that they would have to switch to the new account to earn a competitive interest rate, 360 Savings accountholders across the country have lost out on interest payments Capital One should have paid them.”
Included in the total settlement amount of $245 million is a $300 million component to make “pro rata payments to settlement class members relative to the approximate amount of interest each settlement class member would have earned if their 360 Savings account(s) had paid the interest rate then applicable to the 360 Performance Savings account.” The other $125 million portion will be paid by Capital One as “additional interest payments to settlement class members who continue to maintain 360 Savings accounts (presently approximately 3/4 of the settlement class).”
The settlement further explained that “in order to accomplish such additional interest payments, Capital One shall maintain an interest rate on the 360 Savings account of at least two times the national average rate for savings deposit accounts as calculated by the FDIC.”