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New York Sues Capital One (COF) for Misleading Customers with Its Savings Accounts

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New York Attorney General Letitia James has filed a lawsuit against Capital One, claiming that the bank misled customers with its 360 Savings accounts.

New York Sues Capital One (COF) for Misleading Customers with Its Savings Accounts

New York Attorney General Letitia James has filed a lawsuit against Capital One (COF), claiming that the bank misled customers with its 360 Savings accounts. The bank had advertised the accounts as offering some of the best interest rates in the country, but then locked many customers into a low 0.30% rate, even as rates were rising. In 2019, Capital One launched a new version of the account, called 360 Performance Savings, that offered rates up to 4.35%, but didn’t tell existing customers about it.

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The lawsuit says that Capital One told its employees not to inform 360 Savings customers about the better-paying account unless they specifically asked. As a result, many customers were stuck earning far less interest than they could have. James says this violated New York’s consumer protection laws and is asking the court for fines and compensation for affected customers. She also said that Capital One took advantage of customer trust by making big promises and failing to deliver.

Capital One hasn’t yet responded to the lawsuit, but its current 360 Performance Savings account now pays 3.6% interest. A similar case by the Consumer Financial Protection Bureau was dropped earlier this year after a change in leadership under President Trump. However, James said that her lawsuit will ensure Capital One is held accountable. The bank is also in the process of finalizing its $35.3 billion acquisition of Discover Financial Services (DFS), which is expected to close on May 18.

Is COF a Good Stock to Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on COF stock based on 11 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average COF price target of $212.27 per share implies 7.7% upside potential.

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