BALTIMORE, MD—Maryland Attorney General Anthony G. Brown has joined a bipartisan coalition of 17 other state attorneys general in formally opposing a proposed class action settlement with Capital One, arguing the agreement would shortchange customers allegedly cheated out of billions in interest.
The attorneys general filed an amicus brief (PDF) this week, urging the court to reject the settlement, which they contend fails to hold Capital One adequately accountable for its practices involving its 360 Savings accounts.
“This agreement neither requires Capital One to change the deceptive practices that led to this lawsuit nor gives Maryland consumers fair compensation for their losses,” Attorney General Brown said. “Marylanders deserve settlements that make them financially whole and require companies to change their harmful and unethical policies that caused consumers harm.”
The controversy centers on Capital One’s 360 Savings accounts, which the bank marketed as “high interest” accounts with “one of the nation’s best savings rates.” However, beginning in 2022 as national interest rates rose, Capital One allegedly kept the interest rates on these accounts artificially low.
At the same time, the bank introduced 360 Performance Savings, a nearly identical product offering significantly higher interest rates—at one point more than 14 times higher—to new customers, allegedly without adequately notifying existing 360 Savings customers.
The attorneys general argue this two-tiered system allowed Capital One to avoid paying more than $2 billion in interest to long-term customers.
The proposed class action settlement would provide $125 million in additional interest to customers who still hold 360 Savings accounts. The coalition calls this amount “woefully inadequate,” claiming it is less than 7.5% of the interest they believe Capital One should have paid. The average consumer, who allegedly lost over $717 in interest, would receive less than $54 in direct compensation under the current terms.
The brief also opposes Capital One’s attempt to use the class action settlement to prevent the New York Attorney General’s Office from securing proper restitution through its separate, pending lawsuit against the bank.
In addition to Maryland, the attorneys general from Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Rhode Island, and Washington joined the opposition.
Photo via Pixabay
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