Capital One proposes $425M lawsuit settlement

On Friday, just before closing the $35.3 billion acquisition of Discover Financial Services, Capital One Financial came to settlement terms with customers who were suing the McLean bank. If the agreement is approved by a federal judge, Capital One will pay $425 million to plaintiffs.

According to a filing in the U.S. District Court for the Eastern District of Virginia, Capital One agreed to pay $300 million in pro rata payments to former 360 Savings account customers who alleged that the bank cheated them out of increased interest rates by not informing them of higher rates applicable to the newer 360 Performance Savings account. Settlement class members who continued to maintain 360 Savings accounts will receive $125 million, the document says.

According to the lawsuit, plaintiffs said that 360 Savings accounts were capped at 0.3% in interest rates, while 360 Performance Savings rates hit a high of 4.35% in 2024.

The bank also agreed to pay the plaintiffs’ attorneys’ fees and other expenses out of the settlement, and Capital One will not admit wrongdoing in the settlement.

Last week, New York’s attorney general filed a lawsuit for Capital One depositors in her state.

Multiple parties filed lawsuits against Capital One over its flagship 360 Savings account. In January, during the final days of President Joe Biden’s term, the Consumer Financial Protection Bureau sued Capital One and its holding company, Capital One Financial, alleging that the companies cheated millions of customers out of more than $2 billion in interest payments. However, under the Trump White House, CFPB dropped the lawsuit in February.