A U.S. watchdog is suing Capital One for allegedly misleading consumers about its offerings for high-interest savings accounts — and “cheating” customers out of more than $2 billion in lost interest payments as a result.

In a complaint filed Tuesday, the Consumer Financial Protection Bureau took aim at Capital One’s promises and handling of its “360 Savings” accounts. Despite promoting 360 Savings as an account that provides one of nation’s highest interest rates, the CFPB alleges that Capital One froze its rate at a low level for at least several years, even as rates rose nationally.

At the same time, the CFPB adds, the bank created “360 Performance Savings,” which saw a much higher rate grow. But the agency says that Capital One did not notify 360 Savings accountholders about this new offering and “instead worked to keep them in the dark” — alleging that the company marketed the products similarly to obscure their distinction and forbade employees “from proactively telling” those with 360 Savings accounts about 360 Performance Savings.

These actions mean Capital One “illegally avoided paying billions in interest to millions of consumers,” the CFPB wrote in its Tuesday complaint. The agency says it’s seeking to impose civil penalties and provide financial relief to those impacted.

“Banks should not be baiting people with promises they can’t live up to,” CFPB Director Rohit Chopra said in a prepared statement.

In response, Capital One said that it strongly disagreed with the CFPB’s allegations and plans to “vigorously defend” itself in court. The banking giant added that it was “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration.”

Capital One also maintained that all of its 360 banking products “offer great rates” — and have “always been available in just minutes to all new and existing customers without any of the usual industry restrictions.”

According to disclosures on the Capital One’s website, 360 Savings accounts currently carry an interest rate of just under 0.50%. 360 Performance Savings accounts have an interest rate of about 3.74%.

That means the rate for 360 Performance Savings is nearly 7.5 times higher than that of 360 Savings today. But the CFPB says they’ve been farther apart in the past. In July 2024, the agency notes in Tuesday’s complaint, the 360 Performance Savings rate was more than 14 times that of 360 Savings.

— Associated Press

Media groups challenge AI firms over content

Lawyers for Media News Group and Tribune Publishing, the New York Times and the Center for Investigative Reporting on Tuesday asked a New York judge to reject an effort by OpenAI and Microsoft to dismiss parts of the media companies’ lawsuits accusing the tech giants of stealing reporters’ stories to train their AI products.

The media companies have accused OpenAI and Microsoft of using millions of their copyrighted news stories — without consent, credit, or compensation — to fuel lucrative AI products exploding in popularity like ChatGPT and Copilot.

Microsoft and OpenAI don’t deny they depend on copyrighted material, but say it’s their right under the fair use doctrine and that their products are “a powerful tool for human flourishing.”

The doctrine permits the use of copyrighted materials without permission under certain conditions, including transforming the work for educational purposes provided it does not hurt the current or future market for the materials.

Media News Group is the parent company of the Pioneer Press.

SEC sues Musk over Twitter purchase

The U.S. Securities and Exchange Commission has sued billionaire Elon Musk, saying he failed to disclose his ownership of Twitter stock in a timely manner in early 2022, before buying the social media site.

As a result, the SEC alleges, Musk was able to underpay “by at least $150 million” for shares he bought after he should have disclosed his ownership of more than 5% of Twitter’s shares. Musk bought Twitter in October 2022 and later renamed it X.

Musk started amassing Twitter shares in early 2022, and by March of that year, he owned more than 5%. At this point, the complaint says, he was required by law to disclose his ownership, but he failed to do so until April 4, 11 days after the report was due.

Musk’s lawyer, Alex Spiro, said in a statement that the lawsuit “is an admission by the SEC that they cannot bring an actual case” since Musk has “done nothing wrong.” He called the lawsuit a “sham.”

Wholesale inflation rises in December

U.S. wholesale inflation rose last month on higher energy prices.

The Labor Department reported Tuesday that its producer price index — which tracks inflation before it hits consumers — rose 0.2% last month from November, down from a 0.4% gain the month before. Compared to a year earlier, producer prices rose 3.3%, biggest jump since February 2023 and up from a 3% gain in November.

A 3.5% November-to-December increase in energy prices — led by a 9.7% increase in gasoline prices — pushed the overall index higher. Food prices dipped 0.1% in December.

Excluding food and energy prices, core wholesale inflation was unchanged from November but up 3.5% from a year earlier.

— From news services