December 28th, 2015
Case in point: Higher One of New Haven, Conn., which has been ordered to pay $55 million in restitution and nearly $5 million in civil penalties to settle allegations it misled more than 1 million students with its debit card-based financial aid disbursement service, OneAccount, that it provides to colleges and universities.
The Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) both found that, among other things, Higher One failed to fully inform students of the laundry list of fees associated with OneAccount and how students could obtain their financial aid surplus without the service.
“There was no information on the refund disbursement home page — the first webpage that would appear when a student started the disbursement selection process for the first time — about the ACH transfer to another bank account and paper check options, either of which may have enabled students to access their student financial aid refunds with fewer fees or no fees,” the Federal Reserve stated in its order.
Websites also featured the school logo more prominently than the Higher One logo, which may have falsely suggested that the schools recommended OneAccount over other financial aid disbursement options, the federal agencies said.
The settlements stopped short of shutting down the company. The actions come one year after a federal judge approved a $15 million settlement to a class-action lawsuit that alleged Higher One touted false collegiate endorsements.
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