Class Action News
Drug Lawsuit News
|Higher One Class Action Lawsuit Filed Over Deceptive Fees & Practices|
- Monday, 13 August 2012 10:51
Higher One Class Action Lawsuit Filed Over Deceptive Fees & Practices
By Kimberly Mirando
Seven college students have filed a federal class action lawsuit against Higher One Holdings and Bancorp Bank alleging they “improperly coerced” students into accounts by automatically creating bank accounts for students’ financial aid and then charging them “numerous unconscionable and unusual bank fees.”
The students allege in the Higher One class action lawsuit that the company – which acts as a middleman between a college business office and a student’s financial aid account – automatically places financial aid refunds into a Higher One bank account linked to a Higher One debit card without the student’s knowledge or consent. Higher One then makes it difficult for students to opt out of this account by using three tactics: “first, it bombards students with unsolicited and deceptive marketing materials; second, it intentionally delays access to financial aid funds for students who choose to use other banking providers; third, it conceals the true costs of the Higher One accounts.”
Students have to sign on to the Higher One website to access their student aid, where they can opt to transfer the funds to their own bank accounts or ask for a check. However, Higher One makes them wait from two days to a week to get their money, compared with instant access by using the Higher One account. This means students who need their financial aid money immediately are unable to opt out.
"Because, almost by definition, financial aid recipients are dependent on their financial aid money to survive, Higher One coerces students to remain in the default option and use Higher One accounts in order to have immediate access to their funds," the class action lawsuit states. “Higher One then proceeds to assess and collect deceptive, unusual, unconscionable and, in many cases, unavoidable bank fees in these ‘captive’ banking accounts.”
These unusual and unconscionable fees include nearly a dozen banking fees, including a fee to make PIN-based transactions and to use an outside ATM, resulting in a total cost of $4.50 or more.
Higher One was hit with another class action lawsuit over these deceptive practices and excessive bank fees in April 2012. According to that class action lawsuit (McFall v. Higher One Holdings, et al.), Higher One and Bancorp took at least $66 million in so-called “convenience fees” charged to students in 2010 alone.
Higher One agreed to pay $11 million in refunds to students as part of a lawsuit settlement reached with the FDIC this month. The FDIC accused Higher One and its former partner, Bancorp Bank, of “deceptive and unfair practices” that included charging multiple overdraft fees on a single transaction, holding overdrawn accounts open for months to accumulate fees, and collecting fees on subsequent account deposits, which were typically funds for tuition and other college expenses from student financial aid.
The latest Higher One class action lawsuit is brought on behalf of all students in the U.S. who did not opt-out of the Higher One account created by Higher One without their consent, as well as all Higher One customers who incurred a PIN-based transaction fee, a non-Higher One ATM fee, or an overdraft fee. It is seeking restitution of these fees and over $5 million in damages for Class Members.
A copy of the Higher One Class Action Lawsuit can be read here.
The case is Jeanette Price, et al. v. Higher One Holdings, Inc., et al., Case No. 12-cv-1093-VLB, U.S. District Court, District of Connecticut.
Updated August 13th, 2012
All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions
Top Class Actions Legal Statement
Last Updated on Thursday, 27 December 2012 11:09