Sarah Mirando  |  August 13, 2012

Category: Legal News

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Higher One settlementHigher One, a company that markets debit cards to college students, has agreed to refund nearly $11 million to 60,000 students as part of a settlement resolving allegations that the company charged students excessive fees for its student debit card account program, OneAccount.

The Federal Deposit Insurance Corp. (FDIC) accused Higher One and its former partner, The 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.

Higher One is also facing a class action lawsuit over the fees that was filed in July 2012 by seven students in five states. The $5 million Higher One class action lawsuit alleges the company “improperly coerced” students into its accounts through a system that requires them to “opt out” of accounts the company opens without the students’ knowledge or consent. According to the class action lawsuit, Higher One “uses three tactics to make sure that students do not opt out of this default: 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.”

“Higher One then proceeds to assess and collect deceptive, unusual, unconscionable and, in many cases, unavoidable bank fees in these ‘captive’ banking accounts,” the class action lawsuit states.

In addition to refunding students $11 million in improperly assessed fees, Higher One also signed a consent order with the FDIC that it will no longer charge insufficient fund fees on accounts that have maintained a negative balance for more than 60 days. Higher One is also prohibited from charging more than three such fees to an account on any given day. The company will also pay a $110,000 civil penalty to the FDIC, while Bancorp will pay a $172,000 penalty.

The FDIC said the Higher One AccountNow refunds will begin distribution in December 2012, adding that the company has already begun to institute policy improvements to its overdraft practices and compliance management systems as suggested by the FDIC.

UPDATE: Higher One has agreed to a $15 million class action settlement over allegations it deceptively marketed its OneAccount bank accounts and imposed improper fees. Click here or visit www.OneAccountSettlement.com to find out how to file a claim for the Higher One settlement.

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24 thoughts onHigher One Refunds Students $11 Million as Part of FDIC Settlement

  1. Marcela Zuniga says:

    I had the same problem today.. I went to Walmart and my check was declined …. So, don’t know if it is actually legit.

  2. Feda says:

    Hi received my check but where can I cash it? I tried a check cash in place put no one answered the number when we called. I tried Walmart and it will not go through! Please help!

  3. Cynthia A. Williams says:

    Did+I+have+a+claim+2012-2013+and+how+can+I+find+out ?

  4. claire says:

    Well my check wasn’t honored. What’s the deal?

  5. John Schneider says:

    I used them for my student aid refunds from 2009 to 2013….

  6. John Schneider says:

    I am sure glad I was not expecting a large refund…I Just received mine today April 14, 2015…the check was for $6.57…HAHAHAHHAHAHAHAHA!!!!!

    1. shameeka cooper says:

      How long have you been a customer with them?

  7. NIKKI SHIREMAN says:

    Status Update: The claim review process has been completed and settlement benefit checks are mailing April 10, 2015. Please note that check amount information is not available from class counsel or the settlement administrator.

  8. NIKKI SHIREMAN says:

    Here is some news everybody from the site

    Status Update: The claim review process has been completed and settlement benefit checks are mailing April 6, 2015.

  9. Tiffiani Courtland says:

    Its sad because I didnt receive anything by mail. I have stayed at the same address for 11 years now. I graduated in 2011 and didnt have access to the University email. But now its too late to file a claim per the website.

  10. Lana Macht says:

    How do I find out to make sure my claim was received. I filed mine when it first happened. I am just wondering if I may get anything or what’s going on.

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