Why Capital One Settlement Payments Are Delayed — Potentially Until 2027
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Payments in a $425 million Capital One class-action settlement could be delayed by a year or more due to an appeal seeking to rescind the settlement, meaning more than 5 million class members will have to keep waiting for their checks.
The distribution of payments was expected to begin this week. Instead, the Capital One settlement administrator shared the update that an objector is appealing the settlement in hopes of returning the matter to litigation.
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"As a result of the appeal, any payments to class members from the settlement fund or in the form of increased interest as provided by the settlement will be substantially delayed (potentially over one year)," the settlement website reads.
Appeals are common in large class-action settlements — and most end up failing — but they're often the culprit when payouts take longer than consumers expect.
360 Savings lawsuit: Why Capital One was sued
Multiple lawsuits alleged that Capital One paid lower annual percentage yields (APYs) on 360 Savings accounts once it launched 360 Performance Savings accounts in September 2019.
APYs on the Performance Savings accounts have been higher ever since. Aside from the rates, the lawsuit alleged the two accounts are "otherwise identical," according to the settlement website. At launch, the new accounts paid a 1.9% APY, while the older accounts paid 1%.
The gap widened as the Federal Reserve hiked interest rates in 2022 and 2023. From April 2024 to September 2024, 360 Performance Savings paid 4.35% while 360 Savings paid 0.3%, according to the settlement website.
By June 2024, at least six lawsuits had been filed in California, New Jersey, New York, Ohio and Virginia arguing Capital One underpaid interest to 360 Savings customers. That's when the proceedings were consolidated in the U.S. District Court for the Eastern District of Virginia.
Where People Are Earning With High-Yield Savings Accounts
Capital One continues to deny wrongdoing but agreed to settle. A judge granted final approval of the Capital One 360 Savings Account Interest Rate Litigation settlement on April 20.
In addition to the $425 million settlement fund, Capital One has agreed to match the 360 Performance savings rate on 360 Savings accounts and continue offering both products for at least two years.
In total, the value of the settlement is estimated by a special master to be just over $1 billion.
After fees, costs and service awards are subtracted, the fund will be divided based on "the approximate amount of interest each Settlement Class Member would have earned if their 360 Savings account(s) had paid the interest rate then applicable to the 360 Performance Savings account," according to the settlement website. The biggest beneficiaries will be people who had large savings balances. Individual estimates are not available.
Customers are likely included in the class if they had a 360 Savings account at any point between Sept. 18, 2019 and June 16, 2025.
The Capital One settlement appeal
On June 17, a Capital One customer initiated an appeal, arguing that the settlement falls short by hundreds of millions of dollars. The notice of appeal was filed by lawyer Michelle Coles, who is representing herself and posted a $25,000 appeal bond. Coles was an attorney at the Department of Justice in the Civil Rights Division until 2022; she is an active member of the Washington, D.C., bar.
In an earlier filing, Coles and other objectors argued that "Capital One and class counsel have reached an agreement to settle this litigation worth as much as $9 billion for a mere $425 million."
The legal arguments are complicated, but it boils down to a disagreement over math and how much customers are owed. The settlement website states that the $425 million fund represents around 38% to 57% of what class members could have recovered at trial. Coles argues it's actually no more than about 15%.
"That means they're keeping 85% of our damages," she tells Money. "If they're paying us $425 million, that means they're keeping $2.5 billion dollars of the interest that they owe us."
Coles said her 360 Savings balance averaged around $70,000 during the class period and initially believed she was owed roughly $10,000, according to court filings. Coles presented her objections during the April 20 settlement hearing, which is documented in a court transcript.
Referencing her time at the Justice Department, Judge David Novak said: "You understand that in any litigation, it's a risk/reward. You have to look at what is the likelihood of success versus what is your outcome, right. It's kind of like the old Rolling Stones song, 'you don't always get what you want, but you get what you need,'" according to the transcript.
That remark from Novak "felt like it was a slap in the face because all the settlement agreement does is it rewards Capital One for its fraud," she tells Money.
During the April 20 hearing, Novak continued: "I don't agree with what Capital One has done here. I think what they did is wrong, which is why they're writing such a big check."
But, he said, "You have to look at what the risk of litigation is for the plaintiffs against the reward, which is what the class counsel has done here."
Novak approved the settlement and set the appeal bond at $25,000 — not the $6 million amount that had been requested by the class counsel. Coles says others wanted to appeal, but she was the only one willing to pay the bond.
The lawyers for the settlement class view the appeal as "meritless" and continue to believe "the settlement is overwhelmingly favorable to the class," according to the settlement website.
What to do if you're waiting on a Capital One settlement payment
If you're in the the settlement class, this is an exercise in patience. There's nothing you actually have to do now. Unlike many settlements, this one did not require a claim form; qualification was automatic. Eligible Capital One customers had until March 30 to elect their payment method.
Coles says she expects to file her appeal documents around September, but the U.S. Court of Appeals for the Fourth Circuit has yet to establish the briefing schedule.
Asked how it feels to be in between 5 million people and their money, Coles says class members have been "deceived" into thinking the $425 million agreement is fair. She adds that she thinks it's worth waiting more time to make sure the appropriate payments are awarded.
"I am acting in the class's interest," Coles says. "We've already been waiting six years for Capital One to pay us the interest that they owe us."