CFPB Sues Bank for Deceptive Marketing

The CFPB sued a national bank for deceptive marketing related to two types of savings accounts with nearly identical terms and names ("360 Savings" vs. "360 Performance Savings"), but drastically different interest rates.

In a Complaint filed in the US District Court for the Eastern District of Virginia, the CFPB reported that the bank froze the interest rate for "360 Savings" accounts at 0.30 percent during a period of rising national interest rates, while offering a substantially higher rate on its nearly identically named "360 Performance Savings" account. The CFPB said that during the relevant period, the 360 Performance Savings rate rose from 0.40 percent to 4.25 percent, while the 360 Savings rate remained frozen at 0.30 percent. The CFPB alleged that the bank failed to notify 360 Savings account holders of the new product or its higher rates. The CFPB alleged that the bank obscured the existence of 360 Performance Savings by (i) marketing it under a similar name, (ii) eliminating references to 360 Savings on its website, (iii) excluding 360 Savings account holders from targeted advertising campaigns and (iv) instructing employees not to inform 360 Savings account holders about the higher-rate account. 

The CFPB argued that the bank's practices allowed it to save over $2 billion in interest payments while using the 360 Performance Savings product to attract new deposits.

The CFPB charged the bank with violating the Consumer Financial Protection Act, the Truth in Savings Act and Regulation DD. 

The CFPB requested the Court (i) issue a permanent injunction, and order (ii) restitution for affected consumers, (iii) disgorgement of ill-gotten gains and (iv) civil money penalties.