(MENAFN- Live Mint) The deadline to claim part of the $425 million settlement that Capital One is doing today is Thursday, October 2. The bank is settling a class action lawsuit brought against its holding company by customers in 2024 for freezing its savings accounts interest rates for several years.

As a result of the freeze, customers of Capital One lost billions in interest rate payments, which they now have a chance to claim. However, the settlement awaits court approval, which is set to hear the case on November 6.

What is the Capital One $425 million settlement?

The $425 million Capital One settlement arises from a class action lawsuit filed in the US federal court in Virginia, according to USA Today. The Consumer Financial Protection Bureau (CFPB) had also sued the company earlier this year, alleging that customers had lost $2 billion as a result of the freezing of interest rates.

The CFPB, which dropped its lawsuit in February, had alleged that Capital One marketed its 360 Savings account as "high interest" with a variable rate that was "one of the nation's best," telling them that they would earn significantly more money than others.

Attorney General Letitia James also sued Capital One in May alleging that it misled“its online savings account customers about the interest rates they would receive, allowing the bank to avoid paying the high interest rates that it promised to customers”.

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The multiple lawsuits have prompted Capital One to agree to pay a $425 million settlement to its 360 Savings account customers.

The lawsuits claimed that despite marketing the 360 Savings account as one of the best interest rate returning accounts, Capital One did not raise them and kept them artificially low when other banks across the country increased their rates.

Who is eligible for the Capital One $425 million settlement?

Customers with a Capital One 360 Savings account within the time period of September 18, 2019 and June 16, 2025, are eligible to claim the $425 million settlement.

According to Capital One, customers do not require any form to claim such settlement and all members are by default eligible to receive the payment.

Customers can also choose to receive the money electronically instead of a cheque.

How much money will Capital One customers receive?

“The Settlement provides for $425 million consisting of: (1) a $300 million Cash Settlement Fund to be used to make cash payments to all 360 Savings accountholders in relation to their account balances (the“Class Cash Payment”); and (2) $125 million to be used to make increased interest payments going forward for customers who continue to maintain 360 Savings accounts,” a statement by the bank said.

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Customers who have already closed their 360 Savings accounts or close it before October 2 will receive a class cash payment that is estimated to be 15 per cent higher than customers who choose to keep their accounts.

Customers can still choose to close their accounts after receiving the higher payment.

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