You must have already heard of the 360 Savings accounts by Capital One, and that’s mainly because they were marketed as these high-interest rate accounts. At least that was the perception of these accounts for so long, but now, in this Capital One lawsuit, it turns out that this wasn’t even true. Well, it could have been that they gave higher interests in the initial days, but for years, Capital One has frozen the higher interests, and that too without even letting their customers know about it. Sure enough, when it all came to light, there had to be some legal action taken, and that is what we’re talking about here.
How the Dispute Started
Capital One marketed its 360 Savings account as “high-interest” accounts with “one of the nation’s best” rates. The assumption was straightforward: customer savings rates will go up as market rates increase. But, the reality was different, by a bigger margin actually!
Even though the national interest rates were on the rise, the vast majority of customers were still getting about 0.3% of their money. This differential made many people suspicious, especially compared to other financial institutions out there that were paying out much higher returns. At first, the idea of being deceived crossed the minds of a lot of account holders.
The Consumer Financial Protection Bureau charged Capital One with false advertising in early 2024, claiming that the bank told the customers that the interest rates would vary but actually kept them low for years and years. Despite the CFPB abandoning its case in early 2025, the customer-initiated class action lawsuits kept on going. Almost at the same moment, the New York Attorney General Letitia James brought a lawsuit against Capital One, accusing it of cheating customers and costing them billions of dollars in lost interest.
Not dragging this thing even further and taking a hit on the image of the company, well, Capital One finally settled the matter with a payment of $425 million at the end of 2025.
The $425 Million Settlement Plan
In May 2025, Capital One put forward a $425 million settlement proposal that covers the 360 Savings account customers from September 18, 2019 to June 16, 2025. The settlement consisted of $300 million in direct payments to customers and $125 million set aside for the increase of future interest earnings of existing customers.
Those customers who met the criteria did not have to submit a claim. An automatic payment system was to be used, with provisions for receiving money either electronically or by check. Customers who had their accounts closed prior to October 2, 2025, were entitled to a slightly higher payout. The last court approval hearing was to take place on November 6, 2025.
Why the Settlement Faced Pushback
Before the actual hearing, though, we already saw some opposition to this whole situation. On September 24, 2025, New York’s Attorney General, along with 18 other state attorneys general, filed an amicus brief contending the settlement was unfair.
They were worried about one thing only: the offer of $425 million was a lot less than the $2 billion that customers were said to have lost. It was claimed that the arrangement was giving more to Capital One and less to the victims who weren’t being fully compensated for their losses. This dispute became known nationwide and led to the court deciding to take a closer look at the pact.
Court Rejects the Settlement
Yup, so far, on November 7, 2025, a Virginia federal judge refused to approve the settlement. The court found that the deal did not provide enough recompense to the customers and had issues of fairness, especially regarding the manner in which the payouts were arranged.
Consequently, all disbursements and schedules have been suspended. In the absence of an OK from the new settlement or a case going on with more legal actions, customers are not going to get money.
