A federal judge in Alexandria, Virginia, has given final approval to Capital One Financial Corporation's (NYSE: COF) $425 million class-action settlement, paving the way for automatic payments to eligible customers. The settlement resolves allegations that the bank kept customers in lower-yielding 360 Savings accounts after introducing the higher-rate 360 Performance Savings product in 2019. Payments are expected to begin on or around July 27, provided no appeal is filed.
Who Is Eligible?
The settlement covers individuals and businesses that held a Capital One 360 Savings account between September 18, 2019, and June 16, 2025. This includes joint account holders and co-owners. Importantly, the case does not involve Capital One's credit card business. Most eligible customers do not need to file a claim; payments will be issued automatically unless they opted out of electronic payment.
How Payments Are Calculated
According to the settlement administrator, Epiq Class Action & Claims Solutions, payments will reflect the additional interest customers would have earned if their 360 Savings accounts had received the same annual percentage yield (APY) as the 360 Performance Savings product. For example, between April and September 2024, the 360 Performance Savings offered a 4.35% APY, while the regular 360 Savings paid just 0.30%. By June 2025, those rates were 3.60% and 0.50%, respectively. Deductions will be made for approved expenses, fees, and costs before distributions are sent.
Legal and Regulatory Context
Capital One has denied any wrongdoing, and the court has not found the bank liable. The settlement was shaped in part by state officials, including New York Attorney General Letitia James, who accused Capital One of misleading customers. Under the agreement, Capital One must align the rates of its 360 Savings and 360 Performance Savings products and keep both available for at least two years. The Consumer Financial Protection Bureau had also filed a lawsuit over the matter but dismissed it with prejudice in early 2025.
U.S. District Judge David Novak approved $32 million in attorneys' fees and $1.81 million in expenses, with each settlement class representative receiving a $10,000 service award. Wolf Popper, class counsel for the plaintiffs, estimated the total settlement value—including both cash payouts and future rate-matching relief—at over $1.2 billion.
Important Details for Customers
Paper checks will only be issued for amounts of $5 or more and only to customers who did not select electronic payment. The administrator warns against settlement scams, noting that it will never request Social Security numbers or employer identification numbers. If an appeal is filed, payments could be delayed. The case highlights the ongoing competition among online banks for savers, with Capital One's 360 Performance Savings currently offering a 3.10% APY, while Marcus by Goldman Sachs offers 3.50% APY, both variable.
