EZSchoolPay Lawsuit Alleges Platform Charges Unlawful Junk Fees On Student Lunch Account Deposits

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A proposed class action lawsuit alleges that so-called junk fees assessed by EZSchoolPay on deposits into students’ lunch accounts are unjustifiable and illegal, given that the charges “bear little to no relationship” to the platform’s business costs.

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The 37-page fraud lawsuit claims that EZSchoolPay has “corrupted” school lunch purchases and “injected themselves as middlemen” for no discernible reason other than to “exploit” parents and children and “pad” the defendants’ bottom line, namely through junk fees and guaranteed annual payments from school districts.

The complaint charges that EZSchoolPay misleads parents, guardians and students into believing that their schools or school districts are the entities pocketing the junk fees, even though EZSchoolPay is the “sole beneficiary” of the added charges.

“In fact, EZSchoolPay goes to great lengths to conceal from consumers that school districts have already paid for the cost of setting up the district-specific implementation of the EZSchoolPay website,” the suit alleges.

According to the filing, EZSchoolPay contracts with school districts to provide an online platform where parents and guardians can pre-pay for their child’s school breakfast and lunch. The suit says that EZPaySchool charges “significant” junk fees on every online transaction without offering more economical options, such as allowing larger deposits, permitting fee-free transaction options, or correlating transaction fees to the actual cost of a deposit.

Per the case, when a parent attempts to deposit money into their child’s school lunch account, EZSchoolPay charges a junk fee of at least $2.95 per transaction, well over the actual cost of processing fees for credit cards, which the lawsuit states is about 1.53 percent of the transaction amount.

Similarly, the case states that the cost to process an electronic bank transfer from parents who make recurring automatic contributions to their child’s lunch account is generally between $0.26 and $0.50 per transaction, but EZSchoolPay levies an excessive $2.95 junk fee, more than six times the actual processing costs.

Per the case, EZSchoolPay junk fees violate statutory requirements set under the New York General Business Law, flout restrictions on convenience fees, and “plague” otherwise ordinary transactions made by parents seeking to fund their child’s meals. Furthermore, the case emphasizes that the “burden” of junk fees “disproportionately” affects lower-income families, who tend to make smaller deposits more frequently and end up spending as much as 60 cents of every dollar on unlawful fees.

The lawsuit further alleges that EZSchoolPay has violated guidelines set by the United States Department of Agriculture (USDA) that stipulate that schoolchildren must not be charged additional fees for services related to the delivery of school meals.

The case claims that parents, guardians and schoolchildren are essentially a “captive audience” with no ability to “shop around,” as they are forced to pay junk fees with a “staggering” aggregate cost that bilks families out of about $100 million every year. Other options, such as bringing cash or a check directly to the school cafeteria, tend to be more difficult for working parents, the filing says, “effectively forcing parents to rely on the electronic option or risk their kids going hungry during the school day.”

Hungry students, the case says, are more likely to lose focus and suffer academically, and display more behavioral and disciplinary problems. The lawsuit says that school lunches are crucial to a student’s ability to learn.

The case scathes that EZSchoolPay is nothing more than a “new generation of school bullies” that are “hard at work” making school lunches less affordable for working families.

The EZSchoolPay class action lawsuit seeks to cover all citizens of New York who, during the applicable statute of limitations period, paid junk fees to EZSchoolPay.

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