Financial services provider Higher Ones has agreed to $11 million in restitution to about 60,000 students due to alleged unfair and deceptive practices regarding excessive debit account fees. The agreement by the Federal Deposit Insurance Corp. also covers The Bancorp Bank which issues the OneAccount debit card.

In addition, the FDIC has imposed civil money penalties of $110,000 for Higher One and $172,000 for The Bancorp Bank.

The FDIC consent order requires Higher One to change the manner in which it imposes non-sufficient fund fees. It is required to not charge:

• Non-sufficient fund fees to accounts that have been in a continuous negative balance for more than 60 days;
• More than three non-sufficient fund fees on any single day to a single account;
• More than one non-sufficient fund fee with respect to a single automated clearing house transaction that is returned unpaid within any 21-day period.

In addition, Higher One is required not to make misleading or deceptive representations or omissions in its marketing materials or disclosures and to institute a compliance management system.

Higher One has agreed to make restitution to eligible OneAccount holders for certain non-sufficient fund fees from July 16, 2008 to when Higher One ceased charging the fees in question. Restitution is estimated at $11 million and may be in the form of credits to current account holders and charged-off accounts and by check where the account is closed.

The consent order requires The Bancorp Bank to increase board oversight of all compliance matters, improve its compliance management system, enhance its audit program, correct all violations, significantly increase its management of third party risk and provide to the FDIC details relating to the termination of its relationship with Higher One.

If Higher One fails to complete restitution, the FDIC may require The Bancorp Bank to establish an account in the amount of Higher One’s unpaid restitution.

In agreeing to the issuance of the consent orders, neither The Bancorp Bank nor Higher One admits or denies any liability, according to the FDIC.

In May, Higher One was criticized by a U.S. Public Interest Research Group report accusing it of charging “unnecessary and unfair” debit card fees and using “aggressive” marketing tactics.