Attorney General James teams up with bipartisan coalition to oppose unfair Capital One settlement

New York Attorney General Letitia James is leading a coalition of 17 attorneys general in a bipartisan effort to oppose a proposed class action settlement that could shortchange Capital One customers. The customers in question were allegedly cheated out of over $2 billion in unpaid interest. The legal action stems from a lawsuit filed by Attorney General James against Capital One in May. The lawsuit alleged that the bank misled its online savings account customers regarding the interest rates they would receive. This allowed Capital One to avoid paying the high interest rates that were promised to customers.

In an amicus brief filed recently, Attorney General James and the coalition argued that the proposed class action settlement in a separate case does not effectively hold Capital One accountable. They believe that the settlement would ultimately benefit Capital One at the expense of the deceived and underpaid customers. As a result, they are strongly urging the court not to approve this settlement, which they see as unfair.

Attorney General James emphasized the importance of seeking restitution for customers who were misled and cheated out of their hard-earned savings. Capital One marketed its 360 Savings accounts as high-interest accounts with some of the best savings rates in the nation. However, while interest rates across the country were on the rise, Capital One kept the interest rates for its 360 Savings accounts artificially low. The bank introduced a new type of savings account, the 360 Performance Savings, which offered significantly higher interest rates. This allowed Capital One to avoid paying billions of dollars in interest to 360 Savings customers.

The proposed settlement, according to Attorney General James and the coalition, would allow Capital One to continue with its deceptive practices. While the settlement does provide $125 million in additional interest to 360 Savings account holders, the interest rate would still be much lower than that of the 360 Performance Savings account. This would mean that Capital One would keep more than $2 billion in unpaid interest while customers who were affected would receive a minimal amount in compensation. The coalition believes that the settlement falls short of adequately addressing the issue and fails to require Capital One to change its practices to avoid misleading customers.

Moreover, Capital One has argued that the class action settlement should prevent Attorney General James from securing further restitution for customers through her lawsuit. The coalition is calling on the court to reject the settlement and any attempts to block the Attorney General’s enforcement action.

Attorneys general from various states have joined Attorney General James in opposing this settlement, highlighting the broad bipartisan support for this cause. The legal matter is being handled by Assistant Attorneys General Chisolm Allenlundy and Adam J. Riff from the Consumer Frauds and Protection Bureau in New York. The bureau, led by Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine, is part of the Division of Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.