WASHINGTON – Higher One Holdings Inc. has agreed to return about $11 million to college students for overcharging them for fees on its debit cards and other practices, federal regulators said Wednesday.
The Federal Deposit Insurance Corp. said Higher One is also paying a $110,000 civil fine and agreed to change the way it imposes fees. In addition, the FDIC said that Bancorp Bank, which issued the OneAccount debit card administered by Higher One, is paying a $172,000 fine.
Higher One markets bank cards and checking accounts to students through exclusive deals with colleges and universities. Students who use its accounts sometimes pay fees to gain access to their financial aid money.
New Haven, Conn.-based Higher One violated federal law by charging students multiple fees for overdrawing funds for a single transaction, the FDIC said. The company also allowed debit accounts to remain in overdrawn status for long periods as overdraft fees piled up, and engaged in other deceptive practices, the agency said.
The money will be returned to about 60,000 students who were charged the fees between 2008 and 2011. It may take the form of credits to the accounts of current cardholders and charged-off accounts, or in checks when an account has been closed, the FDIC said.
Higher One and Bancorp Bank neither admitted nor denied legal liability.
Higher One said in a statement Wednesday that it began voluntarily refunding the fees in December 2011.
