Capital One has agreed to settle a long-standing lawsuit by paying $425 million, following allegations that it misled customers with its savings accounts. This settlement, which was filed in the U.S. District Court in Alexandria, Virginia, on May 16, 2025, addresses claims made by customers who were allegedly deceived about the interest rates they were receiving. While Capital One denies any wrongdoing, the settlement aims to compensate affected customers for the lost interest income due to the disparities between accounts.
The issue centers on the bank’s 360 Savings accounts, which were offered at a 1.00% annual percentage yield (APY) for long-time customers. However, Capital One launched a newer product, the 360 Performance Savings account, which offered a more attractive 1.90% APY. Plaintiffs argue that Capital One failed to inform existing customers about this upgraded account, leaving them at a financial disadvantage.
The settlement has raised important questions about transparency in the banking sector. Capital One argued that it had made the terms of both the 360 Savings and 360 Performance Savings accounts clear, but plaintiffs disagreed, claiming that the bank’s marketing of the new account didn’t sufficiently inform old customers of the benefits they could have received.
The Origins of the Dispute: Acquisition and Account Changes
This dispute traces back to Capital One’s acquisition of ING Direct USA, announced in February 2012. At the time, ING Direct was known for its competitive high-yield savings accounts. Capital One continued to offer these accounts under the 360 Savings name after the acquisition, but in 2019, the bank introduced the 360 Performance Savings account. The APY for the older 360 Savings accounts remained at 1.00%, while the new account boasted a significantly higher 1.90% APY.
Many customers, especially those who had held accounts with ING Direct prior to the acquisition, were not made aware of the more favorable terms available through the newer product. The plaintiffs argue that this lack of notification led to substantial financial losses over the years.
Settlement Breakdown: How the Compensation Works
The $425 million settlement is split into two main categories:
- Interest Compensation – $300 million will be allocated to reimburse qualified customers for the interest they would have earned had they been given the 1.90% APY rather than the 1.00% APY.
- Loyalty Compensation – $125 million will be distributed to customers who have maintained their 360 Savings accounts, recognizing their long-term relationship with Capital One.
These funds will be distributed to eligible customers once the settlement terms are approved by the court, which is expected to occur in the coming weeks. The payment process may take several months due to the volume of claims and verification steps involved.
Who is Eligible for Compensation?
To qualify for the Capital One $425M settlement, customers must meet the following conditions:
- Had a Capital One 360 Savings account after the launch of the 360 Performance Savings product.
- Did not fund the 360 Performance Savings account during the relevant period.
- The 360 Savings account must have offered a 1.90% APY or less at the time it was opened.
- Must be able to provide documentation confirming account ownership when contacted by the claims administrator.
How to File a Claim
Although Capital One maintains that it complied with all applicable laws and regulations, the lawsuit illustrates the significant financial impact that this issue had on many customers, with some losing hundreds or even thousands of dollars over time due to the interest rate disparity.
If you believe you are eligible for compensation, here are some steps you should take:
- Look out for notifications: Capital One will be sending official communication regarding the settlement. Check for any emails or letters to confirm your eligibility.
- Prepare documentation: If you receive a notification, be ready to provide evidence of your 360 Savings account.
- Stay updated: Keep an eye on the official settlement website for updates and deadlines for filing claims.
While Capital One continues to assert that it followed proper procedures, this settlement serves as a reminder for consumers to stay informed about changes to their financial products and to inquire about new options when they become available.