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Attorney General Brown and 17 Other States File Amicus Brief Opposing Separate Class Action Settlement That Would Shortchange Customers
BALTIMORE, MD – Attorney General Anthony G. Brown today joined a bipartisan coalition of 17 other attorneys general in opposing a proposed class action settlement that would shortchange Capital One customers who were cheated out of more than $2 billion in unpaid interest. In an amicus brief filed today, the coalition argues that the proposed class action settlement fails to hold Capital One accountable and would ultimately benefit Capital One at the expense of the customers it deceived and underpaid. Attorney General Brown and the coalition are urging the court not to approve this unfair settlement.
“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,” said Attorney General Brown. “Marylanders deserve settlements that make them financially whole and require companies to change their harmful and unethical policies that caused consumers harm.”
Capital One marketed its 360 Savings accounts as “high interest” accounts with “one of the nation’s best savings rates” that would earn its customers more than an average savings account. However, while interest rates rose nationwide beginning in 2022, Capital One kept the interest rates for its 360 Savings accounts artificially low. Instead, Capital One created “360 Performance Savings,” a nearly identical type of savings account that provided much higher interest rates than 360 Savings – at one point, more than 14 times higher. As alleged in a separate lawsuit filed by the CFPB (which the Trump administration has since dismissed) this allowed Capital One to mislead 360 Savings customers and avoid paying billions of dollars in interest.
Attorney General Brown and the coalition argue that the proposed class action settlement shortchanges 360 Savings customers and fails to impose any requirements that Capital One change its behavior to avoid misleading its customers. The settlement would provide $125 million in additional interest to customers who continue to hold 360 Savings accounts, an amount that is less than 7.5% of the interest that the Attorneys General argue Capital One should have paid to consumers. In the time it would take Capital One to pay out the $125 million in additional interest, it would have paid over $800 million at the 360 Performance rate. In total, Capital One would keep more than $2 billion in unpaid interest while the average consumer, who lost out on more than $717 in interest payments, would receive less than $54 in direct compensation under the settlement.
Capital One has also argued that the class action settlement should prevent the New York Attorney General’s Office from securing restitution for Capital One customers through its lawsuit, which was filed after dismissal of the CFPB action. The coalition urges the court to reject the settlement and any attempt to use a private agreement to stymie New York’s enforcement action.
In addition to the Maryland Attorney General’s Office, the attorneys general of Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Ohio, Oregon, Rhode Island, and Washington joined the amicus brief.
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