Capital One 360 Savings Class Action Settlement Thoughts — My Money Blog

Capital One settled a class action settlement involving alleged deceptive marketing because it kept the interest rate on customers with deposits in their older “360 Savings Account” lower without closing them, while simultaneously marketing a new “360 Performance Savings Account” at a higher interest. Many people in the older accounts either thought they were the same or thought they were getting the higher, marketed interest rate. Anyone who had an original “360 Savings” account between 9/18/19 and 6/16/25 is included in the settlement.

The Consumer Financial Protection Bureau estimated that Capital One avoided paying $2 billion in interest by not automatically converting each 360 Savings account to a 360 Performance Savings account. Meanwhile, the settlement amount is really $300 million, with another $125 million earmarked for higher interest rates in the future for the older accounts.

Via this NYT article, you can see charts of both the different interest rates (above) and what would have happened to a single account with $10,000 balance (below).

I just received my postcard regarding the settlement, and the main takeaways are:

• The cash payments will be related to the historical account balances in the older, low-interest accounts.

  There is no evidence to submit. For me, that is probably very little if any. However, they do have a provision to perhaps distribute any leftover funds pro-rata, so who knows.

• I should still choose an electronic payment, because if the amount is less than $5, they will not be sending paper checks and will only send the funds to you via electronic payment. I usually prefer Venmo.

Random side-story! During a jury duty stint years ago, a personal injury lawyer once spent time to explain to us the details of the infamous “I spilled McDonald’s hot coffee on myself” lawsuit.

To make it very brief, it was a specific McDonald’s location that decided to speed up its morning rush by making extra, extra hot coffee (180-190°F) and portioning it into cups ahead of time so that in theory it would stay hot for longer. Coffee made under “normal” operating procedures would not be that hot (135-140°F). 190°F is hot enough for instant 3rd-degree burns requiring skin grafts. To summarize, the details matter.

In this case, one of the problems was that “360 Savings” and “360 Performance Savings” were basically identical. With other banks, they will often tweak something so that the two accounts are a little bit different.

Maybe the minimum balance changes. Maybe one will require a direct deposit or recurring transfers.

Nearly every consumer financial company takes advantage of behavioral tendencies like forgetfulness or inertia. Checking account overdraft fees. Credit card late payment fees.

Auto-renewing subscriptions for Netflix on down. Charles Schwab made over $9 billion in “net interest income” in 2024, which was basically half of their total revenue. Guess what uninvested cash in your Schwab brokerage account earns? 0.05% APY.