You really might wanna check what's in your wallet.
Capital One, the friendly credit card and investment company that uses familiar faces like Jennifer Garner, Charles Barkley, and some random dude just called the "Capital One Guy" in those weird new commercials, has allegedly been engaged in decidedly unfriendly practices.
The Consumer Financial Protection Bureau has alleged that Capital One has cheated their customers out of billions in interest payments.
In a complaint filed Tuesday, the Consumer Financial Protection Bureau took aim at Capital One's promises and handling of its '360 Savings' accounts, which were promoted as accounts providing one of the highest interest rates in the nation. But instead, the CFPB alleges, Capital One froze its rate at a low level for at least several years, even as rates rose nationally.
Long enough that people who invested using Capital One have allegedly lost $2 billion.
That's billion, with a "B."
What appears to have happened is that the "360 Savings" account from the bank froze their interest rates at the low return rate for customers while introducing a "360 Performance Savings" for wealthier customers who invested more.
The "Performance" interest rates kept up with national interest rates -- meaning if you invested at a higher premium you got a better rate of return -- while screwing over the little guy who was kept at an artificially low rate.
'Capital One did not specifically notify 360 Savings account holders about the new product, and instead worked to keep them in the dark about these better-paying accounts,' the CFPB said in a statement. The lawsuit comes at a time when savers have benefitted from the Federal Reserve's decision to ratchet interest rates to fight soaring inflation, which allowed banks to roll out high-interest savings accounts after years of meager rates.
The CFPB also alleged that Capital One instructed their employees to actively hide from "360 Savings" customers that they were not getting nearly the return on investment as the higher dollar investors.
These actions mean Capital One 'illegally avoided paying billions in interest to millions of consumers,' the CFPB wrote in its Tuesday complaint. The agency says it's seeking to impose civil penalties and provide financial relief to those impacted.
'Banks should not be baiting people with promises they can't live up to,' CFPB Director Rohit Chopra said in a prepared statement.
Millions of alleged victims and billions in alleged bilking.
Maybe there's a reason banks have the reputation they do.
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