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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.
UPDATE: Higher One has agreed to pay $15 million to settle the deceptive marketing class action lawsuit.
UPDATE 2: Instructions on how to file a claim for the Higher One OneAccount class action settlement are now available! Click here or visit www.OneAccountSettlement.com for more information.
UPDATE 3: Viewers are reporting that they have received checks from the Higher One class action settlement. Congratulations to everyone who submitted claims and got PAID!
UPDATE 4: On July 25, 2016, Viewers reported receiving a second round of settlement checks for the Higher One OneAccount class action settlement.
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20 thoughts onHigher One Class Action Lawsuit Filed Over Deceptive Fees & Practices
last fall they took over 10 percent of my student loans in charges over 350 dollars. over 6 weeks. its a shake down by a legal mafia. I’m diabetic and had to go without my insulin because i couldn’t afford it thanks to all these fees. now they have started a monthly fee on top of that. why should i have to pay back a loan that they took just over 10 percent of. That money was for me to go to schools not to line their pockets.
UPDATE: Instructions on how to file a claim for the Higher One OneAccount class action settlement are now available! Click here or visit http://www.OneAccountSettlement.com for more information.
I was out of the country for some time, and am definitely an eligible participant in this case, except that the claim form expired just 5 days ago. Is it really too late by only a few days? I keep good records, please contact me if I qualify as part of the class action due to mitigating circumstances.
I recieved an email to join the uit. I filled out the online forms.
I’m trying to find out what happens with us in NC as all I can find is news about other states.
I mean, my fed aid as a music major plus 95 percent of my loans went to applied study fees, which I couldn’t pay without driving 30 miles or paying a ridiculous fee to transfer funds.
Finally, I arranged for a check, which called for 8 business days to arrive, which ended up taking two weeks. The Check is the only free option. Just last month, they deducted the last dollar from my account. Because there is a fee if you don’t keep 100 dollars in the account. I never opened this account. The card was sent to me. The accompanying letter stated that this was the new system. Semesters later, I learned that I had an option for a paper check fifteen business days after the release of funds.
ive had my account with them since march 2013 so what happens to us with all these fees?
ya cause they are still draining us for every drop of blood they can get. they didn’t stop after 2012. how do we get justice?
UPDATE: Higher One has agreed to pay $15 million to settle the deceptive marketing class action lawsuit.
I feel for you all. Only in America can a business illegally steal struggling students money for so long with no consequences. Higher One needs to be straight up put out of business. They have been stealing my money for years. And Do NOT get involved in their new One Account premier, found out the hard way everything they tell you about it is a lie, and months later i am out over 600 dollars because of it.
Higher One is doing the same thing to me. I had 2.00 in my account and Pay Pal had to do a account verification so what they do is pay pal made 2 deposits in my account 0.14 and 0.01. My account the next day was a NEGATIVE 48.00. WHAT THE HECK!! I called customer service was on the phone 2 hours and spoke to 10 people, got called a bitch then they hung up on me. I contacted the FDIC, then started googling this bank and what do you know. I am contacting my attorney and suing them plus more, LOL!!!!!!!!!!!!!! YES!!!!!!!!!!!!!
I myself just had my whole work check took and transferred from my current school account to a past school account (I havent attended in over a year). I called them and asked them why they took it and they said they had a right to because my previous account was in the negative. This is the secondtime they transferred money out of my current account to my old account. My kids had no food and I have absolutely no money because of this.
I would like to also participate in this Class Action lawsuit. Higher One has us cornered into paying this outrageous fees. Either we wait many many extra days to receive a paper check or direct deposit, or we receive the money instantly and must agree to the fees and limited atm access nationwide. I feel cornered into using easy refund because they require me to send some paperwork to them just to get direct deposit started. They love holding onto the money while we wait for our funds. We need those funds now. I need the funds now. My college is already disbursing super late as it is ( Austin Community College ) and I can’t wait for DD or a paper check to buy books and such. Every semester I feel cornered, and every semester I lose as much as 50 dollars to these crooks. They are stealing from the small amount of money we receive from the federal reserve. Let’s stop this madness PLEASE!
I’ve experienced the same financial violations by HigherOne as well. I’m talking about fees that added up to more than just a few dollars. Each time it happened I was referred to the financial aid department of the school I attended in which I graduated this past spring. How can I file or get involved with this class action lawsuit? Somebody please help me because my 3 children suffered during that period of deception.