Bunker Hill Community College & Higher One’s Fees – Class Action Lawsuit Investigation


UPDATE – September 9, 2012

According to a an online petition here, “Higher One levies unfair and deceptive fees, causes constant inconvenience, displays no care or concern whatsoever for their account holders, and makes it nearly impossible to contact them whilst experiencing any of the many technical difficulties that are constantly experienced while using their services.”

UPDATE – August 9, 2012

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  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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NOTICE: If you are, or have been a student at Bunker Hill Community College, you are welcome to contact attorney Preston Leonard at (617) 329-1295 for more information.

According to a recent class action complaint against Higher One Holdings Inc. (NYSE: ONE), it is alleged that:

  • Higher One Holdings, Inc., (“Higher One”) and The Bancorp Bank (“Bancorp”) has engaged in unfair and unconscionable practices of automatically creating bank accounts for unsuspecting college students, luring those college students into using Higher One banking accounts, then subsequently assessing and collecting deceptive and improperly disclosed bank fees on such banking accounts. 
  • Higher One has arrangements with hundreds of colleges and universities around the country whereby a student’s scholarship, federal financial aid, and/or loan money is automatically deposited into a Higher One bank account. Financial-aid refunds – the money left over after the school deducts its tuition and fees, which students are to use for things like books and living expenses – are automatically deposited into a Higher One bank account linked to a Higher One debit card. Students then may access their financial aid money at an ATM or a merchant that accepts MasterCard.
  • Higher One, which is not a bank, partners with The Bancorp Bank to provide checking account services to students.
  • At many colleges around the country, students’ financial aid money is automatically deposited into a Higher One account.
  • Even before matriculating, students are provided Higher One debit cards in the mail Students are also 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, And students are forced to use a Higher One website in order to access their financial aid money. When, on that Higher One website, students are asked to choose how they would like their financial aid refund disbursed, Higher One concedes students’ other banking options, deceives students about its excessive and unconscionable fees, and does not adequately disclose the full complement of fees students will be subjected to by Higher One. 
  • Higher One then charges students many different fees when students try to use their financial aid money, much of which is made up of federal loans and grants. Higher One deceives students about these fees,and does not adequately disclose these fees, either before or after a Higher One account is opened. Moreover, as discussed below, these fees are not reasonably avoidable. 
  • Many students pay Higher One’s unconscionable bank fees with borrowed money, often at 7 percent interest or higher.
  • In 2010 alone, Higher One took in at least $66 million on so-called “convenience fees’ charged to students.
  • Higher One and Bancorp prey upon financially unsophisticated college students with deceptive, undisclosed, and unconscionable service fees. Many of these service fees, having been paid with borrowed student loan money, will burden students for years, if not decades, to come. Others of these service fees will consume funds that are intended for use in furthering a student’s education.
  • 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 education expenses.
  • Students cannot reasonably avoid certain Higher One fees. 
  • Higher One’s unlawful, unfair, and fraudulent business practices as well as its deceptive advertising, means that college students are harmed (1) at the time of account opening, when Higher One automatically opens checking accounts on behalf of students and does not properly disclose all fees prior to forcing and encouraging students to choose its services; (2) once an account is opened, Higher One’s account documents deceive students about applicable fees and do not adequately disclose certain, bank fees; and (3) even if students could somehow understand all the fees applicable, they cannot reasonably avoid these fees.
  • Had Higher One not automatically opened checking accounts on students’ behalf, bombarded them with deceptive advertising, and failed to adequately disclose account fees, students could have chosen a bank which offered similar services without the unconscionable fees discussed herein — many of which are rarely, if ever, charged by other banks.”

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For more background on this problem, read:

(1) The Campus Debit Card Trap – Are Bank Partnerships Fair To Students? by U.S. PIRG, here.

(2) Colleges’ bank deals saddle students with big fees by Daniel Wagner, AP Business Writer / Boston Globe, here.

(3) Card fees bite students, by Yvonne Abraham Boston Globe, here.

(4) Debit cards on campus, New York Times editorial, here.

(5) Higher One, Student Financial Aid Company, Under Fire For Charging Students Excessive Fees, Huffington Post, here.

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There are four Higher One – affiliated academic institutions in Massachusetts:

(1) Bunker Hill Community College
(2) Bristol Community College
(3) Mount Wachusett Community College
(4) Westfield State University

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Higher One ATM Locations in Massachusetts:

BHCC – Charlestown Campus
250 New Rutherford Ave
Boston, MA 02129

BHCC – Charlestown Campus
250 New Rutherford Ave
Boston, MA 02129     D Building

BHCC – Chelsea Campus
175 Hawthorne St
Chelsea, MA 02129

Bristol Community College – G Building
777 Elsbree Street
Fall River, MA 02764

Bristol Community College – K Building
777 Elsbree Street
Fall River, MA 02764

MWCC- Leominster Campus
100 Erdman Way
Leominster, MA 01453

MWCC- Leominster Campus
Westfield State University-Wilson Hall
577 Western Avenue
Westfield, MA 01085

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Bunker Hill Community College ID Card/ One Card:

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