Higher One Reaches $15M College Debit Card Class Action Settlement

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Higher One Holdings Inc., a financial services company for college students, has agreed to pay $15 million to settle at least five separate class action lawsuits over its allegedly deceptive fee practices. Higher One contracts with banks to perform the banking services associated with its university-branded OneAccount debit cards.

The five Higher One class action lawsuits were filed in 2012 in Alabama, Connecticut, Mississippi, Illinois and Kentucky. They were eventually grouped into one consolidated class action lawsuit that alleged Higher One coerced college students into signing up for debit checking accounts in order to access financial aid money to be used for a purpose other than paying tuition.

According to the Higher One class action lawsuit, the financial services company automatically places financial aid refunds into a Higher One account linked to a OneAccount debit card without the student’s knowledge or consent. Higher One allegedly makes it difficult for students to opt out of the account by providing them with unsolicited and deceptive marketing materials, delaying access to financial aid funds for students using other banking providers and concealing the true costs associated with Higher One accounts.

The deceptive marketing class action lawsuit alleged that Higher One’s marketing practices coerced students into using the company’s debit card and paying the associated fees. The plaintiffs claim that Higher One deceived students into believing that Higher One was the method preferred by colleges for students to make their financial aid payments. Further, the class action lawsuit alleges Higher One charged excessive ATM and PIN fees.

A February 2014 report by the U.S. Government Accountability Office (GAO) indicated that nearly 1 out of 10 colleges that receive federal financial aid for students issued debit cards for financial aid refunds. According to the GAO report, Higher One controlled as much as 57 percent of the market for college debit cards in 2013. 

If approved, the $15 million Higher One class action settlement will reimburse students for ATM fees, fees charged on PIN-based transactions, account maintenance fees and inactivity charges.

Class Members of the Higher One class action settlement include all students who had a Higher One account and were charged one of the fees between 2006 and August 2012. Class Members will be notified about the class action settlement by postcard or email.

In 2011, Higher One and its former partner Bancorp Bank agreed to issue $11 million in refunds to students as part of a settlement with the Federal Deposit Insurance Corp. (FDIC). Under the terms of the college debit card settlement, Higher One agreed to change its overdraft and fee disclosure practices.

The Higher One Deceptive Marketing Class Action Lawsuit is In re: Higher One OneAccount Marketing and Sales Practices Litigation, MDL. No. 2407, in the U.S. District Court for the District of Connecticut.

UPDATE: 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 2: 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 3: On July 25, 2016, Viewers reported receiving a second round of settlement checks for the Higher One OneAccount class action settlement.