Attorney General Dana Nessel of Michigan is standing firm with a bipartisan group of fellow attorneys general against what they call an unjust proposed settlement with Capital One. This case revolves around more than $2 billion in unpaid interest that Capital One is accused of withholding from its customers. In a recently filed amicus brief, the 18 attorneys general argue that the proposed class action settlement is insufficient and unfairly benefits Capital One at the cost of its customers.
The controversy began with Capital One's promotion of its 360 Savings accounts, which were advertised as offering "one of the nation’s best savings rates." Despite rising interest rates nationwide, beginning in 2022, Capital One has been accused of maintaining low rates for these accounts while offering a higher-paying account, 360 Performance Savings, that was almost indistinguishable. According to the amicus brief, Capital One's customers were misled and denied significant amounts of interest income.
In a statement obtained by the Michigan State Attorney General's Office, Dana Nessel expressed her disapproval of the proposed settlement, saying, "This settlement lets Capital One off the hook for deceiving customers while also undermining the ability of state attorneys general to hold bad actors accountable.” Nessel added, “I stand with my colleagues in urging the Court to reject this deal and ensure consumers get the restitution they deserve.” The coalition is calling on the court to dismiss the settlement and reject Capital One's attempt to prevent the New York Attorney General's Office from pursuing further restitution for affected customers through its lawsuit.
The terms of the proposed settlement would see Capital One paying $125 million in additional interest to 360 Savings account holders. However, the attorneys general argue that even with these payments, the rates would still be considerably lower than those of the 360 Performance Savings accounts. In the time it would take for Capital One to pay out the $125 million, the company would have paid over $800 million at the higher rates. Ultimately, customers would receive less than $54 on average, a pittance compared to the more than $717 loss in potential interest payments per customer.
Joining Michigan in this legal stance are the attorneys general from various states, including heavy hitters like California and New York. The coalition's broad geographical spread underlines the national importance of the case and the shared interest states have in ensuring fair treatment of consumers. As the court considers the coalition's arguments, Capital One's customers across the country are left waiting to see if justice will be served in their favor or if financial juggernauts will again slip the grip of accountability.
