Richmond, VA: Capital One Financial Corporation has agreed to a $425 million settlement following allegations that the bank provided misleading savings account interest rates to its customers. The settlement aims to resolve claims that Capital One understated the annual percentage yield (APY) paid to account holders on certain savings products, leading to an unfair financial impact on consumers across multiple states.
The lawsuit, brought forward by state regulators and consumer advocacy groups, focused on discrepancies between the advertised savings rates and the actual yields that customers received over a prolonged period. Plaintiffs argued that Capital One’s disclosures about how interest was calculated and compounded were unclear, causing many accountholders to earn less than expected on their deposits.
Under the terms of the settlement, Capital One will pay $425 million to affected customers, with funds distributed proportionally based on account balances and length of affected accounts. In addition, the bank has agreed to revise its savings account disclosures to provide clearer, more transparent information about interest rates and how they are applied. Capital One will also implement enhanced compliance and transparency measures to prevent similar issues from recurring…