Class Action Lawsuit Against Higher One for Deceptive Credit Card Fees
A California resident and college student has filed a class action lawsuit against Higher One and its banking partner, The Bancorp Bank, in Ventura County Superior Court. The class action lawsuit alleges that the plaintiff and other Higher One account holders were deceived into using a Higher One account in order to access their college funds, and then charged unfair bank fees that were not properly disclosed to them. The lawsuit alleges these practices violate the California consumer protection laws and the electronic funds transfer act.
Higher One provides integrated financial aid disbursement services for universities. It has arrangements with hundreds of universities around the country whereby a student’s financial aid money is automatically deposited into a Higher One bank account – without authorization from the student.
Before a student even matriculates in classes, they are provided a Higher One debit card in the mail and bombarded with advertisements and emails encouraging them to use the Higher One cards to access their financial aid money “immediately” and “faster” than any other method.
However, students are charged fees which most other US banks do not charge, such a 50-cent swipe fee charged each time the card is used as a PIN-based debit card instead of a signature-based credit card, as well as a fee each time students use it at a non-Higher One ATM.
In 2010, Higher One took in $66 million in “convenience fees” charged to students, according to the lawsuit. “Targeting financially unsophisticated students with excessive bank fees — and using scarce financial aid money to pay those fees — is unethical and immoral, and makes it more difficult for students to meet legitimate educational expenses,” the lawsuit alleges.
A recent report by the US Public Interest Research Group agrees with many of the allegations made in the lawsuit calling the problem, “The Campus Debit Card Trap.”
If you have had similar problems with deceptive credit card fees, please contact Khorrami LLP for more information.