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Capital One settles lawsuit with social media creators over shopping extension

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Capital One (COF.N) has reached a settlement with social media creators who accused its Capital One Shopping browser extension of diverting affiliate marketing commissions. The settlement notice was filed Thursday in federal court in Alexandria, Virginia, with preliminary approval expected by November 17.

The lawsuit centered on claims that the extension, which helps millions of users find online discounts, wrongly appeared at checkout as if shoppers had clicked Capital One’s referral links. Creators—including bloggers, influencers, YouTubers, and others—said this allowed the bank to collect millions in commissions that should have gone to them.

Capital One, the sixth-largest U.S. commercial bank, did not admit wrongdoing. In a statement, the company said evidence showed the extension “recognizes and follows industry rules and is aligned with its advertising partners,” adding that consumers will not see changes as a result of the settlement.

In June, U.S. District Judge Anthony Trenga refused to dismiss the case, finding it plausible that Capital One intentionally overrode tracking codes like cookies that documented when shoppers had engaged with creators’ content. Capital One has maintained that its extension does not unlawfully replace cookies or take credit for commissions.

The bank acquired the tool when it bought online shopping startup Wikibuy in 2018. Other companies, including Microsoft (MSFT.O) and PayPal (PYPL.O), have faced similar lawsuits over their shopping extensions.

The case is In re Capital One Financial Corp, Affiliate Marketing Litigation, U.S. District Court, Eastern District of Virginia, No. 25-00023.

New York Sues Zelle Over $1 Billion in Consumer Fraud Losses

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New York Attorney General Letitia James filed a lawsuit against Zelle, claiming the electronic payment platform’s failure to adopt key security measures allowed fraudsters to steal more than $1 billion from consumers. The case was filed in Manhattan state court following the U.S. Consumer Financial Protection Bureau’s decision in March to drop a similar case.

James alleged that Zelle’s parent, Early Warning Services, owned by seven major U.S. banks, knew about the platform’s vulnerabilities for years but resisted implementing safeguards. She said fraudsters exploited the platform through scams such as fake utility bills, nonexistent goods, and impersonating banks, leaving victims without support even after money was stolen.

Zelle responded that fraud occurs when users are tricked into sending money and that over 99.95% of transactions are completed without reported fraud. The company called the lawsuit a “political stunt” and warned that holding it liable could raise consumer fees.

The lawsuit seeks stronger anti-fraud protections and restitution for affected New Yorkers. Previous actions by James include suits against Capital One and settlements with MoneyGram over similar consumer protections issues.

Capital One Faces Possible CFPB Action Over Savings Account Practices

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Capital One has disclosed a potential enforcement action from the Consumer Financial Protection Bureau (CFPB) related to alleged misrepresentations about its savings accounts. The bank received a notice from the CFPB earlier this month, which indicated that the federal agency might proceed with enforcement or litigation.

This development traces back to a lawsuit filed by customers in 2022, who claimed they were not adequately informed of differences in interest rates between two of the bank’s accounts. Capital One had introduced its “360 Performance Savings” account, which featured a higher interest rate compared to the pre-existing “360 Savings” account. Plaintiffs in the lawsuit argued that Capital One failed to communicate these rate differences effectively, resulting in missed earning opportunities for customers.

Capital One, however, has argued it had the contractual right to adjust interest rates at its discretion and that the information about the newer account and its benefits was accessible on its website. In response to the customer lawsuit, Capital One filed a motion to dismiss the case.

The CFPB has not commented on the matter, though the agency’s probe coincides with Capital One’s pending $35.3 billion acquisition of Discover Financial Services, a move that could significantly impact the payments sector. This acquisition is currently under regulatory review, with additional scrutiny from New York Attorney General Letitia James, who is assessing whether the deal could breach state antitrust laws. In July, Capital One pledged $265 billion toward lending, philanthropy, and investments over five years if the acquisition proceeds.

The Wall Street Journal was the first to report on Capital One’s disclosure of the CFPB’s potential enforcement action.