Los Angeles, CA: A student at Ventura College in California has filed an unfair business practices class action against Higher One alleging the company automatically creates bank accounts for students, without their knowledge, and unjustly charges fees associated with accessing student loan funds placed into those accounts.
In her lawsuit, student Sherry McFall alleges that Higher One charges onerous fees and misleads students, specifically, that Higher One's debit card is deceptively marketed as a school's recommended method for receiving financial aid refunds.
Higher One, a publicly traded company, disburses students' financial aid for more than 830 campuses. Students are contacted by Higher One before they ever arrive on campus saying it's partnering with the school. The company automatically opens the student's account, so that the only way the student can elect to get the money differently is to go into the Higher One website and figure out how to move it, says the lawyer representing the plaintiffs, Hassan Zavareei of Tycko & Zavareei.
Zavareei alleges that Higher One's fees are especially egregious because they redirect to the financial institution money that students have earmarked for college. "We're talking about government-subsidized loans that students are already paying interest on, and now they are getting fees they have to pay on top of that."
The class is seeking resistution of all PIN-based transaction fees and non-Higher-One ATM fees paid to the defendant by the plaintiffs and classes, as well as actual damages and attorney's fees.