Have a Capital One account in NJ? You may be owed part of a $425M Capital One settlement

If you had a Capital One savings account in the last six years, you may be owed part of a $425 million class action lawsuit that accused the bank of falsely advertising its interest rates in an alleged bait and switch scheme.

While Capital One’s recent $35 billion takeover of Discover has been recent news, the Warren Buffett-backed Capital One has been fighting a class action lawsuit since it was filed in a Virgina federal court last year. The final formal settlement agreement is awaiting a judge’s approval, although preliminary details were filed on May 16. As part of the agreement, Capital One has denied any wrongdoing.

The class-action was combined from several separate lawsuits across the country, including New Jersey, Pennsylvania, Delaware and New York.

Here’s what we know about the settlement, and whether you may be eligible for cash back in New Jersey.

Capital One lawsuit details

Capital One first launched its 360 Savings Account in February 2019, and at the time it was advertised as a high interest savings account. By September 2019, that account was no longer being offered to customers and it was replaced by the 360 Performance Savings Account.

Customers who sued Capital One claim the bank offered new customers significantly higher interest rates through its new 360 Performance Savings accounts, while locking out existing 260 Savings account holder into a much lower rate.

The disparity between the two accounts came as the Federal Reserve hiked interest rates in 2022. Capital One froze its 360 Savings rate at 0.3% at the time but increased its 360 Performance Savings rate to as high as 4.35%, according to the suit.

As a result, Capital One avoided paying over $2 billion in interest to its customers between 2019 — when the Performance Savings account began — and 2025.

Letitia James sues Capital One

The class action has drawn legal action from regulators, including Letitia James, the New York attorney general. On May 14, James sued Capital One on behalf of depositors in her state for failing to notify 360 Savings account customers of “artificially low” interest rates to “intentionally” mislead customers to avoid having to pay out millions of dollars in interest, she said. in a release.

Am I eligible for Capital One settlement 2025? Here’s what to know

The settlement class is preliminary those who had a Capital One 360 Savings account at any point between Sept. 18, 2019 through the date in which the judge signs the preliminary order. A formal settlement agreement, along with preliminary approval, is expected to be filed by June 6, 2025, according to the court order. The settlement will include joint and co-holders of 360 Savings accounts.

How much money will I get in Capital One settlement?

The $425 million settlement, according to the preliminary terms, will be paid out equally to accountholders in two ways:

• $300 million to all members of the class action lawsuit: The amount will be the interest they would have earned in the higher-yield account (360 Performance savings).
• $125 million will go to depositors with current 360 Savings accounts (about ¾ of the class): Their accounts will now earn at least double the national average rate for savings accounts, which is calculated by the FDIC.

Lori Comstock is a New Jersey-based journalist with the Mid-Atlantic Connect Team.