Capital One, one of the largest banking conglomerates in the United States, has agreed to pay US$425 million to its customers to settle a massive class action lawsuit. The scandalous part of this whole affair is that the bank punished its customers for their loyalty. Thousands of people with Capital One accounts were left with a miserable 0.3% interest rate on their savings, while Capital One offered up to 4.3% to new customers. Loyalty is dead, and companies like this are the ones that killed it.
Capital One is one of the largest banking corporations in the country: it is known for its credit cards, savings accounts, and checking accounts under the 360 brand. They are one of the banks that place the most emphasis on digital banking. If you have had a Capital One bank account for many years, this scandal may affect you too.
The Interest Rate Trap
The whole problem stems from this digital bank’s flagship product: the 360 savings account. For years, this bank offered it as a competitive “high-yield” product. However, all that changed in September 2019. That’s when Capital Guan launched an almost identical product: the 360 Performance Savings Account. This savings account offers a much higher interest rate than the previous one. While the US Federal Reserve raised rates, the old account (360 Savings) remained frozen, paying a measly 0.3%.
The new account, on the other hand, paid peaks of up to 4.3% at its highest point. The crux of the matter is that Capital One did not adequately notify its existing customers about the existence (or benefits) of the new product they were offering. Loyalty was not only not rewarded, but punished by inertia. Customers who stayed with the original account lost years of growth.
It is estimated that those affected suffered this from September 18, 2019, to June 16, 2025. The interest losses for customers were collectively estimated at more than US$2 billion. Needless to say, the $425 million class action settlement is a bargain for Capital One compared to what it should have paid customers in the first place. Despite this, Capital One has acted wrongly, even though it is seeking to recover that debt from savers.
The $425 million settlement
Although the total amount is $425 million, it will be divided into two parts to provide full compensation. First, a fund of $300 million will be estimated to pay for lost interest. Potential beneficiaries include both current customers and those who closed their 360 savings account during the period covered by this lawsuit. The amount each person receives will be calculated later, taking into account how much money they had in the account and how long they kept this savings account open. The goal is to pay the difference between what they actually earned and what they would have earned if they had been offered the higher-yield account.
An additional $125 million will be used for customers who still have the old savings account open. The bank has agreed to pay these accounts an interest rate that is at least double the FDIC national average for a period of time. In this way, it is trying to ensure that the remaining customers are not stuck with a low rate again.
Who qualifies for the class action?
As we have not stated, any person or entity that has had a 360 savings account from 2019 to 2025 may be part of the Class Action. Most members did not need to submit an active claim form, but rather Capital One automatically identified eligible customers through its records. If you did not take action, you are included in the settlement and will benefit. Your immediate step is to watch for official notification by email or physical mail from the Settlement Administrator.
The legal process will close with final approval from a judge, scheduled for November 6, 2025. Payments will be distributed once the judge has given final approval and all appeals have been resolved. The money is expected to be distributed in late 2025 or early 2026.