https://www.wsj.com/finance/investi...-savings-complaints-b9adc1e9?mod=hp_lead_pos4 PHOTO ILLUSTRATION: EMIL LENDOF/THE WALL STREET JOURNAL, ISTOCK By Rachel Louise Ensign Jan. 21, 2024 5:30 am ET 312 David Fucillo built up his emergency fund over the years with direct deposits into a savings account at Capital One Financial COF 2.45%increase; green up pointing triangle with above-average interest rates. Last fall, he realized the account was no longer paying him much of anything, even though broader rates were up dramatically. The 44-year-old editorial-content manager’s five-figure balance was earning just 0.3%. “I probably missed out on over $1,000 a year,” he says. Fucillo isn’t alone. When the Federal Reserve started raising interest rates in 2022, many customers of the McLean, Va., bank assumed their rates would go up. Instead, Capital One is paying them far below the 4.35% it advertises on its main savings account. The issue dates back to a little-noticed change Capital One made in the era of low rates. In 2019, the lender introduced a new savings account called 360 Performance Savings. Existing customers were kept in older accounts that had a similar name, 360 Savings, which the bank previously advertised as having “a great rate” but has since closed to new customers. When the Fed started its rate increases, Capital One only raised rates on 360 Performance Savings accounts. Customers around the country who have the older accounts are complaining about the discrepancy to the Consumer Financial Protection Bureau, according to a Wall Street Journal review that found two dozen complaints detailing experiences similar to Fucillo’s in the agency’s database. Those with the old accounts say they were never told about the existence of a new account that pays more. Some asked the bank for back interest but say they were denied. Advertisement - Scroll to Continue “I am outraged that for the last two years, [the bank] has paid me a pittance,” one Maryland customer wrote the agency in October. (The published complaints are anonymous.) “They essentially abandoned existing customers in pursuit of new customers and never bothered to tell us.” The CFPB has received complaints about interest rates paid to some Capital One savings-account holders. PHOTO: TING SHEN/BLOOMBERG NEWS The bank is facing a proposed class-action lawsuit, filed in federal court in July, over the issue. Dozens of affected consumers have reached out, said Philip Black, one of the lead lawyers in the case. “Over the years, we set out to greatly simplify our savings offerings, most of which were inherited via multiple acquisitions,” Celia Edwards Karam, president of Capital One’s retail bank, said in a statement to the Journal. Capital One’s Performance Savings accounts are marketed widely and aren’t restricted to new customers, she added. Paying customers less boosts profit for Capital One, particularly as it can charge more on credit-card and other loans these days. The ninth-largest bank in the country, Capital One is a big credit-card issuer and has a huge savings-account business. More than 60% of the bank’s $316 billion in interest-bearing deposits are savings deposits, which include money-market accounts that currently pay consumers 0.8%. The bank paid an average rate of 3.02% on savings deposits in the third quarter, a figure that includes commercial and small-business deposits, it said in a securities filing. SHARE YOUR THOUGHTS What should be the outcome for depositors who lost out on market-leading interest rates with Capital One? Join the conversation below. The rate on the 360 Performance Savings account is in line with those offered by high-yield banking competitors such as Ally Financial and Goldman Sachs. They all pay far more than what the biggest banks—including JPMorgan Chase and Bank of America—offer on their standard savings accounts. Drawn by the opportunity to earn more than he could at a traditional bank, Greg Mishkin opened savings accounts at ING Direct USA about two decades ago. He became a Capital One customer when it acquired ING Direct and its seven million customers in 2012. Mishkin, a 53-year-old market researcher, says he keeps close track of his finances and has moved money into vehicles such as certificates of deposit recently. He felt comfortable leaving a six-figure sum in Capital One savings accounts because it seemed to be paying well when he checked the bank’s website monthly. The only savings rate he saw was for 360 Performance Savings. “I’m not a set-it-and-forget-it kind of guy,” the Atlanta-area resident says. “I was vigilant.” After reading an American Banker story about the lawsuit against the bank over the issue, Mishkin dug into the details of his own accounts and learned many were the older type. He is angry about missing out on thousands of dollars in interest and is moving all of his money to Ally.
COF isn't the only bank that did this. I had accounts at other banks (CIT & Brio Direct?) that did the same thing.
Why didn't these customers just check how much was being deposited in the account monthly? If they had they would have known they were getting ripped off. Looks like fairly unsavvy customers. I guess these are the types these bank fuck over easily.
I don't see any reason to keep more than the bare minimum at a bank. Earning 0% on a savings account in this environment is really unacceptable.
%% MOSTLY true; I have gotten more itty bity bank interest @ SCHW+ community banks, than planned ; but SCHW money market require$ 24 hours notice so i use both. Actually since they admit ''he dug in the details'' its his fault/LOL.Really cant blame banks for not wanting to be high bidder on interest rates. Bank in CO made a fortune on giving customers Weatherby guns instead of bank CDs interest. Looked in that , good marketing/ nota real , real good rate @ the time
There are a number of sketchy big banks that I stay clear of. Wells Fargo is number 1. Close behind is Bank of America and HSBC. I guess COF should be added to that list.