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Capital One customers may wait a year for $425 million payout

Capital One customers expecting a share of the bank's $425 million settlement may now have to wait more than a year because of a legal appeal. ©Image Credit: Wiki Commons

If you were expecting a payout from Capital One's $425 million class action settlement to arrive any day now, you may want to lower your expectations and set your mind on next year. A legal appeal has put the brakes on the settlement and eligible customers could be waiting more than a year before seeing any money.

Why the payout is getting delayed

The settlement had already been approved by a judge and payments were expected to begin this month. Then, one class member filed a Notice of Appeal, a legal filing that asks a higher court to review the decision. According to the settlement website, the appeal seeks to undo the settlement entirely and send the case back into litigation. That means the payout is effectively on hold until the appeal is resolved.

The person who filed the appeal argues that the settlement doesn't recover enough for customers who lost out on interest earnings. In other words, they believe affected account holders deserve more than what's currently being offered.

If the appeal succeeds, the settlement could be renegotiated or the lawsuit could continue in court. If it doesn't, payments would eventually resume, just much later than originally planned.

A quick refresher course on the lawsuit

The case centered on Capital One 360 Savings accounts. Customers claimed the bank kept interest rates on those accounts significantly lower than the rates offered through its 360 Performance Savings accounts, even as interest rates rose elsewhere.

The lawsuit accused Capital One of marketing its savings products in a misleading way by not increasing rates for existing 360 Savings customers at a pace comparable to the newer account.

Capital One denied any wrongdoing but agreed to pay $425 million to settle the case back in April.

Is eligibility affected?

Nothing has changed, as far as eligibility in the settlement is concerned. You may qualify if you had or still have a Capital One 360 Savings account anytime between September 18, 2019, and June 16, 2025.

If you're part of the settlement class, you don't need to panic. The appeal doesn't mean the settlement is dead. The timeline just got a lot murkier. So, if you have been mentally spending your Capital One settlement money, you might want to put those plans on hold.

Source: AL.com

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