WEX subsidiary fined $1.75 million for part in deceiving students with financial aid program
A subsidiary of South Portland-based WEX Inc. has been fined $1.75 million by financial regulators and ordered to pay restitution to customers for its role in deceiving college students about financial aid disbursements.
The Portland Press Herald reported that WEX Bank signed a settlement agreement Wednesday with the Federal Deposit Insurance Corp., agreeing to pay the fine and a share of $31 million in restitution to 900,000 customers. The company is sharing the restitution costs with Higher One, a Connecticut company that is affiliated with WEX Bank and provides disbursement services to students.
WEX’s corporate spokeswoman didn’t respond to an email Thursday morning seeking comment.
In fining WEX Bank and Higher One, the FDIC concluded that Higher One’s website and associated materials, which were approved by WEX Bank, omitted information about fees, features and limitations of its debit-card “OneAccount” product, which is used to pay for costs beyond tuition.
As a result, Higher One improperly collected $31 million in fees from students from May 4, 2012, to July 15, 2014, the FDIC said.
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