Capital One $425M Settlement REJECTED, Will You Still Get Paid? Latest Dec 2025 Update

A federal judge rejected Capital One’s $425 million class action settlement on November 6, 2025, ruling the deal doesn’t fairly compensate millions of 360 Savings account holders who lost interest for years. U.S. District Judge David Novak said the deal appeared to provide account holders less than 10% of their damages while Capital One continues paying dramatically lower rates.

The ruling halts payments that were expected to begin in early 2026 and sends both parties back to negotiate a better deal. While this delay frustrates the nearly 10 million affected customers, consumer advocates believe it could result in substantially larger payouts.

What Is the Latest Capital One Class Action Lawsuit Update?

Judge David Novak of the Eastern District of Virginia rejected the settlement at what was expected to be the final stage of the case, now sending both parties back to the negotiating table.

The November 6, 2025 ruling came after 18 states, led by New York Attorney General Letitia James, objected to the settlement. The states filed a brief urging the judge to reject the agreement, calling it “deeply flawed” and detrimental to consumers who were denied fair interest rates.

Judge Novak blasted the agreement as “neither reasonable nor adequate,” saying the deal would likely only compensate account holders for less than 10% of the potential interest they lost.

Key Points from the Rejection:

Judge Novak found that under the settlement agreement, 360 Savings account holders would have recovered only about 10% of what they would have earned if Capital One had provided them the “high interest” that it promised upfront.

The judge also criticized Capital One’s notification efforts. He argued the email Capital One presented as evidence that the bank was informing account holders of the higher-yielding savings account, titled “Earn a higher APY with a new account today,” was disguised as advertising rather than a notification.

Current Case Status:

• Settlement rejected November 6, 2025
• Case: In re Capital One 360 Savings Account Interest Rate Litigation, No. 1:24-md-03111-DJN, U.S. District Court, Eastern District of Virginia
• Parties ordered to resume settlement negotiations
• No new settlement date announced
• Trial scheduled for July 2026 if settlement talks fail

Specific Allegations Against Capital One

The class action lawsuit alleges Capital One deceived millions of customers through a dual-account structure that kept longtime savers earning minimal interest while marketing higher rates to new customers.

The Two-Tier Account System:

When the 360 Performance Savings account was launched in 2019 as essentially the successor to the legacy 360 Savings account, it offered a 1.9% interest rate versus the 1% yield that the older product paid out.

From that point the rates went in dramatically opposite directions, with the old 360 Savings account dropping to 0.3% annual percentage yield while the rate on the newer offering rose as high as 4.35% APY.

What Plaintiffs Claim:

The lawsuit filed by Wolf Popper LLP on behalf of Capital One 360 Savings account holders alleges:

• Capital One falsely promised high interest rates on 360 Savings accounts
• The bank quietly offered much better rates to new customers on similarly named 360 Performance Savings accounts
• Capital One froze legacy account rates at 0.3% while Performance Savings rates peaked at 4.35%
• The bank failed to notify existing customers they could switch to the higher-yielding account
• Capital One violated consumer protection laws and breached duties of good faith and fair dealing

Consumer advocates, citing internal rate sheets disclosed in the lawsuit, estimate this “dual-tier” structure cost savers up to $2 billion in foregone interest.

Regulatory Findings:

The Consumer Financial Protection Bureau (CFPB) initially sued Capital One in January 2025 but later dropped the case following a leadership change. The CFPB determined the practice violated truth-in-advertising standards that require clear disclosure of material rate changes.

Why the Settlement Was Rejected

Judge Novak’s rejection focused on three critical failures of the proposed settlement.

Inadequate Compensation:

Judge Novak found that the strength of the plaintiffs’ claims justified “significantly greater relief,” saying the deal seemed to give 360 Savings depositors less than 10% of their damages, and left them with the low-yielding accounts while 360 Performance Savings customers earned four to eight times more.

“These millions of class members would continue to experience the same financial harm that they have already experienced for years,” Novak wrote.

Insufficient Interest Rate Increases:

The judge found that the increase would be too small, noting “Under the proposed settlement, and based on current interest rates and the pace at which the proposed $125 million additional interest pool has been spent so far, these class members will receive roughly 0.8% interest on their deposits for less than 16 months, at which time Capital One will revert them back to whatever interest rate it likes”.

Novak pointed out “That interest rate previously sat as low as 0.3% for much of the relevant period”.

State Opposition:

The states said 360 Savings depositors would earn just 0.78% under their class-action settlement, below the 3.5% that Capital One now offers 360 Performance Savings depositors.

According to the states, this would save Capital One more than $2.5 billion without requiring it to change its behavior, while providing typical depositors just $54 of the $717 in interest lost.

Growing Judicial Trend:

Courts rarely denied class-action settlements in the past, but rejections are becoming more common in recent years, says Eric Chaffee, a business law professor at Case Western Reserve University’s School of Law.

“Judge Novak’s decision fits within that growing trend of judges taking a harder look at settlements they view as unfair to class members,” says Chaffee.

The Original Settlement Terms (Now Rejected)

Understanding what was proposed helps clarify what might change in renegotiation.

$425 Million Breakdown:

The rejected settlement divided funds into two parts:

$300 Million Cash Fund:

• Direct payments to eligible 360 Savings account holders
• Calculated based on lost interest during the class period
• Accounts closed by October 2, 2025 would receive approximately 15% more

$125 Million Interest Pool:

• Enhanced interest payments for customers maintaining 360 Savings accounts
• Intended to provide at least double the FDIC national average
• Would last approximately 16 months based on spending rate

How Payments Would Have Been Calculated:

For each 360 Savings account that existed during the timeframe referenced in the lawsuit, the total amount would be calculated as “the approximate amount of additional interest that would have been earned on the account during the Class Period had the account received the interest rate of the 360 Performance Savings product”.

That number would then be multiplied by a “to-be-determined value,” which was estimated to be around a 15% increase, though that number was subject to change based on attorney fees.

Who Is Eligible for the Class Action?

Eligibility criteria remain unchanged despite the settlement rejection, as the class itself remains active.

You Qualify If:

• You held a Capital One 360 Savings account at any time between September 18, 2019 and June 16, 2025
• You received a lower interest rate than the 360 Performance Savings account during this period
• You remain in the class unless you previously opted out

Eligibility Details:

Former customers qualify based on historical account activity—you don’t need an active account. Joint account holders and businesses qualify proportionally.

How to Verify Eligibility:

Settlement notices were mailed in August 2025 to all identified class members. If you received a notice titled “Capital One 360 Savings Account Settlement Notice,” you were included.

Check old emails, physical mail, or your Capital One account statements from September 2019 through June 2025. If you held a 360 Savings account (not 360 Performance Savings) during this period and earned rates around 0.3%, you likely qualify.

Will You Still Get Paid After the Rejection?

The answer depends on what happens in renegotiation.

Most Likely Outcome:

Legal experts say the parties will renegotiate a revised settlement that addresses Judge Novak’s concerns. This typically results in:

• Higher total settlement amount
• Larger individual payouts
• Stronger requirements for Capital One to notify customers
• More substantial interest rate increases for ongoing accounts

Possible Timeline:

• Renegotiation could take 3-6 months
• New settlement hearing likely in 2026
• If approved, payments would follow 3-6 months after approval
• Estimated payout timing: mid-to-late 2026

Other Possibilities:

Better Settlement: Because Judge Novak indicated the original deal was too small, a revised settlement will likely offer substantially more compensation.

Trial: If negotiations fail, the case proceeds to trial in July 2026. Plaintiffs could win more at trial, but also risk getting nothing if they lose.

No Payment: If the case goes to trial and plaintiffs lose, affected customers receive no compensation.

What You Should Do Now

Even though the settlement was rejected, there are important steps to take.

1. Preserve Your Settlement Notice

If you received a notice between August and October 2025, keep it safe. This document proves your eligibility and may contain claim numbers or PINs needed later.

2. Update Your Contact Information

Valid email addresses and mailing information ensure you receive official updates about the revised settlement. Contact Capital One to update your information if you’ve moved.

3. Monitor Official Sources

Watch for announcements from:

• The official settlement website (when reactivated)
• Capital One direct communications
• Court docket through PACER: Case No. 1:24-md-03111-DJN, Eastern District of Virginia
• Wolf Popper LLP (plaintiffs’ counsel) website

4. Avoid Scams

Large settlements attract fraudulent messages. Never provide personal information or payment to anyone claiming to expedite your settlement check. Valid communications will only come from Capital One or the court-appointed settlement administrator.

5. Consider Your Account Options

If you still maintain a 360 Savings account:

• Compare current rates: 360 Savings earns approximately 0.3% while 360 Performance Savings offers around 3.5%
• Capital One allows you to open a 360 Performance Savings account and transfer funds
• Other banks offer competitive high-yield savings accounts
• Moving your funds doesn’t disqualify you from the settlement

6. Don’t Opt Out

Unless you plan to pursue individual legal action, don’t opt out. The revised settlement will likely offer better terms than the original rejected deal.

Capital One’s Legal Response and Defense

Capital One has denied all wrongdoing throughout the litigation.

“Capital One denies all claims asserted against it in the Action, denies all allegations of wrongdoing and liability, and denies all material allegations of the Complaint,” the complaint states.

“The Court has not determined that Capital One did anything wrong; instead, the Plaintiffs and Capital One have decided to settle the lawsuit”.

Capital One’s Position:

In statements about the rejected settlement, Capital One called the $425 million accord “reasonable” given the risks of more litigation. The bank maintains the original settlement fairly compensated account holders.

Capital One has not yet publicly responded to Judge Novak’s rejection or indicated whether it will propose a larger settlement amount.

Ongoing Litigation:

Three major lawsuits have been filed against Capital One over its savings products. The Consumer Financial Protection Bureau sued the bank in January but later dropped the suit following a leadership change when President Donald Trump returned to the White House.

A lawsuit brought by New York Attorney General Letitia James requesting compensation for affected New York customers is still pending.

The New York case proceeds separately and could result in additional compensation for New York residents.

How This Differs from the 2019 Data Breach Settlement

Capital One faced a separate class action over its 2019 data breach—do not confuse these two settlements.

2019 Data Breach Settlement (Separate Case):

In 2019, Capital One suffered a major cybersecurity breach exposing personal information of approximately 100 million customers. A separate $190 million settlement was reached for this breach.

Data Breach Settlement Status:

The only active benefits currently available to Settlement Class Members are Identity Defense Services and/or Restoration Services provided by the Settlement, which have been extended through February 13, 2028. The claim filing period, payment reissue period, and other administrative options are now closed.

The Order and Judgment Granting Final Approval of Class Action Settlement was granted on September 13, 2022. The deadline to file a claim for Lost Time or Out-of-Pocket Losses was September 30, 2022. Payments to Claimants with eligible claims were issued beginning on September 28, 2023.

Key Differences:

Some customers may be eligible for both settlements if they were affected by the 2019 breach AND held a 360 Savings account during 2019-2025.

What Legal Experts Say About the Rejection

The settlement rejection signals important shifts in how courts evaluate class action fairness.

Consumer Protection Implications:

Legal experts note that judges have recently been taking a harder look at settlements they view as unfair to class members. Attorneys general from 18 states weighed in with objections to the settlement, and that type of high-profile input likely played a role in the judge’s taking a closer look at the case.

Expected Outcomes:

Most legal observers expect Capital One will propose a substantially larger settlement rather than risk trial. The judge’s language strongly indicated plaintiffs have a solid case that could result in even higher damages at trial.

Timeline Predictions:

Settlement negotiations typically take 3-6 months. A new agreement could be reached by spring 2026, with a final approval hearing in summer 2026 and payments beginning late 2026.

Industry Impact:

This case has already prompted other banks to review their savings account structures and disclosure practices. Financial institutions with dual-tier savings products face increased scrutiny from regulators and potential class action exposure.

Frequently Asked Questions

Will I still receive money from Capital One?

Likely yes, but not immediately. The settlement rejection means both sides must renegotiate. A revised settlement will probably offer more money than the original $425 million deal, but it will take longer to receive payment—potentially late 2026 or early 2027.

Do I need to file a claim or do anything now?

No. The original settlement required no claim form—payments would have been automatic once you confirmed payment preferences. A revised settlement will likely maintain this structure, but wait for updated instructions from official sources before taking action.

How much will I receive?

Payment amounts will be recalculated under any new settlement. Under the rejected deal, the judge noted typical depositors would receive just $54 of the $717 in interest lost. A revised settlement should provide substantially more.

Individual amounts depend on your account balance, how long you held the account during September 18, 2019 through June 16, 2025, and the interest rate differential between what you earned and what 360 Performance Savings paid.

Can I still opt out of the lawsuit?

The October 2, 2025 deadline to opt out or object has passed. Unless the court sets new deadlines under a revised settlement, you remain part of the class automatically.

What if I closed my 360 Savings account?

You still qualify if you held the account at any time between September 18, 2019 and June 16, 2025. Former customers are included in the class and will receive payments when a settlement is approved.

Should I move my money out of my 360 Savings account?

Moving funds to a higher-yield account (whether Capital One’s 360 Performance Savings or another bank) doesn’t disqualify you from the settlement. Consider the rate difference: 360 Savings earns approximately 0.3% while competitive accounts offer 3.5% or higher.

What happens if the case goes to trial?

The class action case could go to trial in July 2026 if it’s not resolved before that time. At trial, plaintiffs could win substantially more than the rejected settlement amount, but also risk losing and receiving nothing.

How do I avoid settlement scams?

Only trust updates from verified sources:

• Official Capital One communications from @capitalone.com domains
• Court docket at PACER (Case No. 1:24-md-03111-DJN)
• Wolf Popper LLP (lead counsel) website
• Never pay anyone claiming to expedite your settlement payment
• Legitimate settlement administrators never ask for payment or sensitive personal information via email

Is this related to the 2019 Capital One data breach?

No. These are separate lawsuits. The 2019 data breach settlement (approximately $190 million) was finalized in 2022, and claim deadlines have passed. The 360 Savings account lawsuit is a different case about interest rates, and it remains ongoing.

What about the separate New York lawsuit?

Capital One is also facing a lawsuit over the same issue in New York state, where Attorney General Letitia James has alleged that the company misled customers about the existence of its higher interest savings account. This case proceeds separately and could result in additional compensation for New York residents.

When will I know about a new settlement?

Monitor the official settlement website (when reactivated after renegotiation), check your mail for notices from the settlement administrator, and watch for updates on the court docket. Major legal news sources will also report when a revised settlement is filed.

Additional Resources:

• Case Information: In re Capital One 360 Savings Account Interest Rate Litigation, Case No. 1:24-md-03111-DJN, U.S. District Court, Eastern District of Virginia
• Lead Counsel: Wolf Popper LLP
• Court Dockets: PACER Case Locator
• Consumer Protection: FTC Consumer Information
• Related: Capital One Data Breach Settlement (Separate Case)

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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