Categorized | Civil Justice Update

Higher One agrees to $11 million in restitution to college students for overcharges.


The AP (8/9, Gordon, Writer) reports that “Higher One Holdings Inc. has agreed to make restitution for about $11 million to college students for overcharging them for fees on its debit cards and other practices.” The FDIC said the company is also paying a $110,000 civil fine and agreed to change the way it imposes fee, while “Bancorp Bank, which issued the OneAccount debit card administered by Higher One, is paying a $172,000 fine.” The FDIC claims Higher One violated Federal law “by charging students multiple fees for overdrawing funds for a single transaction,” while also allowing debit accounts “to remain in overdrawn status for long periods as overdraft fees piled up, and engaged in other deceptive practices.”

The Wall Street Journal (8/9, Subscription Publication, 2.08M) reports that a consent order with the FDIC says Higher One must refrain from charging “nonsufficient fund” fees on accounts that have a negative balance over 60 days, among other things. Mark Volchek, CEO of Higher One, said in a statement, “We immediately responded to these recommendations by voluntarily discontinuing these practices and crediting back account holders in December of 2011. We believe the low fine imposed reflects how seriously we take our commitment to our customers, the degree of the issue and our swift resolution of it, which impacted only about 1% of our customers.


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