The company Central Piedmont Community College uses to issue debit cards will pay more than $11 million to resolve claims that it deceptively charged students fees, the FDIC announced Wednesday.
Higher One has contracts with hundreds of colleges and universities around the country to offer student ID cards linked with checking accounts or disburse financial aid. East Carolina University also has a contract with the company.
The FDIC found that Higher One charged multiple overdraft fees on a single transaction, allowed accounts to remain overdrawn to continue to rack up fees, and took money intended for tuition payments to cover fee balances, according to the agency.
Higher One will reimburse about 60,000 students $11 million in improper fees. It will also pay a penalty of $110,000. Its banking partner, The Bancorp Bank, will pay a $172,000 penalty.
The company will also have to stop charging fees on accounts with negative balances for more than 60 days, stop charging more than three overdraft fees per day and not charge multiple overdraft fees on a single transaction.
In the settlement, Higher One neither admits not denies the claims.
Update, 12:15 p.m. Friday: In a statement, Higher One CEO Mark Volchek said the company has already reimbursed the 2 percent of customers affected. "We believe the relatively low civil money penalty imposed reflects how seriously we take our commitment to our customers, the degree of the issue, and our level of cooperation with the FDIC," he said in the statement.
Wednesday, August 8, 2012
College debit card issuer Higher One must pay $11 million
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10 comments:
So the company stays in business, none of the executives go to prison or suffer personal losses, and the fines get passed on to customers.
Garbage.
How are the fines passed on to customers? Seems to me they are getting reimbursed.
Banks and credit companies have similar suits and for much more money on a fairly regular basis. No heads are sent rolling.
Where does all that "fine" money go???
Anonymous 4:20,
You are just as clueless as the government. Economics 101: ALL business costs get passed on to the customer!
This falls into the same category as "there's no such thing as a free lunch..." but then, Dems don't get that one either!
Higher One is a deceptive company. I was charged fees but was eventually reimbursed after making a claim with the Better Business Bureau.
No John dems don't get that one because dems are not thieves like the conservative pigs that run this company....do your research !!!
@11:55...
You're demanding someone else do their research before speaking, and yet you still managed to label the entire management of this firm as "conservative pigs" in your run-on sentence. Do you know Mark Volchek or Miles Lasater or where their political leanings fall?
Those that are long of tongue are often short of breath. You are no exception. Next time when you want to say something, before you do it, don't. You'll be better off, and so will everyone else. It's a win/win.
No punishment!!!! That is wrong. The company admits no guilt or anything and the FDIC let's them go free just like the "fat cats" in 2007+. Several of the "fat cats" should be punished. CPCC needs to find another vendor for the students!!!
"stop charging fees on accounts with negative balances for more than 60 days, stop charging more than three overdraft fees per day and not charge multiple overdraft fees on a single transaction."
So now these wonder kids will think its okay to have a negative balance, and over draft their accounts cuz' daddy government will bail them out?
Awesome!
Wonder what kind of kickbacks CPCC gets for using these Con artists? I hear the parttime staff gets paid via these crooks cards.
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