Capital One sued for ‘cheating’ customers

The Consumer Financial Protection Bureau is suing Capital One for 'cheating' customers out of $2 billion in interest.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange, here's what we're watching

00:04on the street today.

00:05It was a choppy session on Tuesday as investors tried to guess what's next.

00:10There's speculation Donald Trump might put gradual tariffs in place when he takes office.

00:15Meanwhile, a report showing tamer than expected wholesale inflation raises questions about

00:19when the next Fed rate cut will be.

00:22Another clue on inflation comes Wednesday with the Consumer Price Index.

00:26In addition, earnings season kicks off with JPMorgan Chase leading the way for big banks.

00:32Speaking of banks, Capital One is in hot water with the Consumer Financial Protection Bureau.

00:37The consumer banking watchdog accuses Capital One of cheating savers out of more than $2

00:43billion in interest payments.

00:46At issue are two of Capital One's savings accounts with very similar names but very

00:52different interest rates.

00:53The CFPB alleges the names intentionally mixed up customers who thought both accounts were

00:59the same higher-paying savings accounts.

01:02The difference, however, is quite stark.

01:05The legacy 360 savings account, which originally was an internet-only higher-yield account,

01:10had a 0.3% interest rate from 2019 to 2024.

01:14Meanwhile, a newly created 360 performance savings rate went from 0.4% in 2022 to 4.3%

01:24in January 2024.

01:27According to the CFPB's complaint, Capital One did not specifically notify 360 savings

01:34account holders about the new product and instead worked to keep them in the dark about

01:39these better-paying accounts.

01:41CFPB Director Rohde Chopra said, banks should not be baiting people with promises they cannot

01:47live up to.

01:48Capital One defended the practice and said it would vigorously defend itself in court.

01:54That'll do it for your daily briefing from the New York Stock Exchange.

01:57I'm Conway Gittins with The Street.