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Customers Bank pays $960,000 CMP

Phoenixville, PA
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The FRB has issued a consent order to cease and desist and assessed a civil money penalty against Customers Bank of Phoenixville, Pennsylvania. The order addresses the participation of the bank and its agent, Higher One, Inc. of New Haven, Connecticut, in deceptive practices in violation of of the Federal Trade Commission Act. Higher One provided institutions of higher education with financial aid disbursement services for students through, among other things, a deposit account and debit card product known as the "OneAccount." The deceptive practices employed by Higher One, under Customers Bank's oversight for approximately four months and for which the Board assessed the $960,000 penalty, included:

  • the omission of material information about how students could get their financial aid disbursement without having to open a OneAccount with Higher One;
  • the omission of material information about the fees, features, and limitations of the OneAccount product prior to requiring students to make a selection regarding the method for financial aid disbursement;
  • the omission of material information about the locations of automated teller machine (ATMs) where students could access their financial aid disbursements without cost and the hours of availability of those ATMs; and
  • the prominent display of the school logo, suggesting that the school endorsed the OneAccount product.

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