Higher One, Inc. Hit with $28.5 Million in Fines, Restitution Fees from U.S. Regulators
December 23 2015 - 11:10AM
Dow Jones News
WASHINGTON— Federal regulators hit college financial services
provider Higher One, Inc. Wednesday with $28.5 million in penalties
and restitution charges saying the company mislead student
financial aid recipients into improper fees, and other
transgressions.
New Haven, Conn.-based Higher One is also sharing with WEX
Inc.'s WEX Bank the responsibility for returning $31 million to
affected students.
Higher One had previously disclosed that a fine could be coming.
Last year, a spokesman for the firm said it has made significant
changes to its business to avoid similar problems in the
future.
A spokeswoman for WEX didn't immediately respond to a request
for comment.
Higher One Chief Executive Marc Sheinbaum said in a statement
that "product and service changes have already been completed to
comply with a significant portion of the issues raised, which
mostly relate to practices ended in 2013. After joining Higher One
in 2014, I charged our team to set new standards for transparency
and compliance." He said the company has since sold its
disbursements business, including the "OneAccount" product cited by
regulators.
The Federal Reserve ordered Higher One to give back to students
$24 million in fees, and slapped it with a fine of $2.23 million.
The Federal Deposit insurance Corp. separately levied a $2.23
million fine on Higher One and ordered it and WEX Bank to share the
cost of returning $31 million to students.
The agencies said hundreds of thousands of students were
affected by the companies' practices between 2012 and 2014 and
would be receiving restitution.
The FDIC also fined WEX Bank $1.75 million.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
December 23, 2015 11:55 ET (16:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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