An explosive new lawsuit filed by the Consumer Financial Protection Bureau (CFPB) alleges that Capital One bank cheated its customers out of $2 billion. According to the lawsuit, Capital One deceived and abused its depositors, baiting them with promises of high interest rates before switching the terms and paying little interest. The CFPB claims that Capital One purposefully hid the truth about these accounts from customers and concealed the availability of a new product that paid much higher interest.

In 2012, Capital One acquired ING Direct, an online bank known for its generous interest rates. The next year, ING Direct savings accounts were rebranded as 360 Savings. Former ING Direct account holders were assured that the rebranded account would still be “no-fee, no-minimum checking and savings accounts—with the great rates that we know are important to you.”

For the next six years, 360 Savings accounts were marketed to the public as “high interest” online accounts. “Your money will earn much more than what it would in an average savings or money market account,” Capital One’s website promised from May 2013 to at least March 2016. “What’s the catch? There is none.”

Emails and other marketing materials said 360 Savings accounts had a “top savings rate,” “one of the nation’s highest savings rates,” and “one of the nation’s best savings rates.” Capital One told customers that the 360 Savings rate could vary, but changes would be based on “[c]urrent market conditions” and “[o]ur competition.” The lawsuit argues that “[i]t was reasonable for consumers to interpret those representations to mean that the 360 Savings rate would increase when interest rates rose more generally.”

As a result, the bank suggested that customers would not need to monitor the rate closely, describing it as a “[c]ompetitive rate you can bank on.” In 2017 and 2018, it assured customers, “[t]here’s nothing for you to do. Just sit back and enjoy the extra interest.” The bank also knew through its internal surveys that customers did not check their interest rates frequently, and half of the bank’s customers did not know the interest rate on their savings accounts.

Until 2019, Capital One handled the 360 Savings accounts largely as promised. Then, things changed dramatically.

In September 2019, Capital One created a new type of savings account called “360 Performance Savings.” The account was identical to the 360 Savings account in every way but one: 360 Performance Savings accounts paid much higher interest rates. At launch, 360 Performance Savings accounts paid a 1.9% annual interest rate. At the time, 360 Savings accounts paid 1%.

That spread would increase substantially over time. Starting in December 2020, Capital One froze the rate of the 360 Savings accounts at 0.3%. By January 2024, the 360 Performance Savings account paid 4.35% annual interest, and the 360 Savings account still paid 0.3%.

So why didn’t every 360 Savings account holder convert to a 360 Performance Savings account? They were not told about the new accounts.

Read More: POPULAR INFORMATION