New York: The US government’s consumer watchdog agency is suing Capital One for allegedly cheating millions of consumers by failing to pay investors in its high-interest savings accounts more than $2 billion in interest.

Capital One is accused by the Consumer Financial Protection Bureau (CFPB) of keeping interest rates on its flagship 360 Savings accounts low even as rates increased across the country. The CFPB also claims that Capital One introduced a new account with better interest rates without informing its 360 Savings clients about it. Because of that choice, consumers lost out on over $2 billion in interest payments.

In a statement, CFPB Director Rohit Chopra stated, The CFPB is suing Capital One for defrauding families of billions of dollars on their savings accounts. Banks shouldn’t entice customers with unfulfilled promises.

Deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration, Capital One said in a statement.

The new account was marketed widely, including on national television, with the simplest and most transparent terms in the industry, a Capital One representative stated, adding, We strongly disagree with their claims and will vigorously defend ourselves in court.

The marketing of the 360 Savings account by Capital One, which described the interest gained from it as one of the nation’s, top, best, and highest, is in question. The bank lowered and then froze the ‘360 Savings’ account rate to just 0.30%, even as rates increased nationwide, according to the CFPB, between 2019 and mid-2024.

At that time, a brand-new account called 360 Performance Savings was introduced, with interest rates rising from 0.40% in 2022 to 4.35% in January 2024.

By concealing the existence of 360 Performance Savings, a separate product with a higher rate than 360 Savings accountholders, Capital One planned to keep ‘360 Savings’ accountholders in their lower-yielding accounts, according to the CFPB.

According to the agency, the complaint aims to halt the bank’s illicit behavior, offer compensation to injured customers, and enforce civil money penalties.