The Non-Financial Ledger: What This Actually Costs

Jennifer Dodge woke up one morning and opened an email from EZSchoolPay. She had set up the auto-replenish feature because it was easier. She was a parent of three kids in the New Hartford Central School District, she had a life to run, and the auto-pay option meant one less thing to remember. The email told her that $22.95 had been charged to her account to put $20.00 on her children’s lunch balances. Two dollars and ninety-five cents had gone somewhere else entirely. Not to the school. Not to the food. To a company in Canada.

She had not been warned. The charge hit her account before any notice appeared. She found out the fee existed the same way millions of parents find out: after the money was already gone.

That is the design. The complaint filed in federal court makes this explicit. EZSchoolPay’s auto-replenish system extracts the payment amount plus the junk fee before disclosing that any fee will apply at all. The company’s own Terms of Use promise parents they will be notified of any fee before the transaction is finalized. They are not. The money moves first. The receipt comes after.

Now stretch that experience across the school year. Multiple kids, multiple deposits, every deposit taxed. A family scraping together $8.00 to make sure their kid eats that day hands EZSchoolPay $2.95 of it. That is $2.95 on an $8.00 deposit. That is 36.9% of the transaction. That is not a fee. That is a toll booth on the cafeteria door.

For families with children on free and reduced-price lunch, the math becomes grotesque. The federal government set up these programs specifically because food insecurity damages children’s ability to learn. Studies cited in the lawsuit show that hungry kids concentrate less, perform worse academically, and face more behavioral and discipline problems. Sixty percent of low-income students report coming to school hungry. The school lunch program exists to solve that. EZSchoolPay exists, in part, to intercept money before it can. The CFPB found that for families in that income bracket, up to sixty cents of every dollar deposited into a lunch account goes to the payment processor. The child gets forty cents’ worth of food.

There is no way to shop around. The school district chose EZSchoolPay. Parents cannot choose a different platform. Fee-free options, where they technically exist at all, require parents to physically bring cash or a check to the school cafeteria during business hours. For a single parent working two jobs, that option does not exist in any practical sense. Some districts have moved to limit or eliminate cash and check payments altogether, leaving the electronic portal as the only real choice. EZSchoolPay knows this. The entire business model depends on it.

The company actively prevents competition from entering the school. The contracts it signs with districts, which parents are never shown, lock out other vendors. No competing service can offer lower fees within the same school or district. EZSchoolPay sits behind the only door, and it charges you to walk through it every single time.

Meanwhile, the school district is already paying EZSchoolPay for the service. The platform costs, the implementation, the maintenance: the district covers those through a guaranteed annual contractual payment. The junk fee that parents pay is not covering any cost that has not already been covered. It is pure extraction, layered on top of a service already paid for by the public institution that serves those families’ children.

Eight United States Senators wrote to the Department of Agriculture in September 2024, calling this practice “unacceptable.” The CFPB published a report naming it. The Biden administration called junk fees out by name in a State of the Union address. EZSchoolPay kept charging. It is still charging today.

The Corporate Architecture: Who Owns EZSchoolPay

EZSchoolPay is not a scrappy startup. It is a business unit inside one of Canada’s largest enterprise software conglomerates. Understanding who owns what explains how the money flows and why accountability is difficult to pin down.

• Constellation Software Inc. is the parent company, headquartered at 66 Wellington Street West, Suite 5300, TD Bank Tower, Toronto, Ontario. It has failed to register as a business entity with the New York State Department of State despite actively transacting business in the state.
• N. Harris Computer Corporation is a Canadian entity organized under the laws of Canada with its principal office at 1 Antares Drive, Suite 100, Ottawa, Ontario. It is registered in New York with DOS ID 3995186 with a registered agent at United Agent Group Inc., Harrison, NY.
• Harris School Solutions, Inc., doing business as EZSchoolPay, is the operating entity that runs the school lunch payment portal. Harris Computer Systems is listed in the complaint as a wholly-owned subsidiary of Constellation Software Inc.
• Together, these entities control, manage, and dictate the policies of EZSchoolPay. The lawsuit names all of them as defendants to close off corporate shell-game defenses.

How the Scheme Works: The Mechanics of Extraction

EZSchoolPay’s revenue model has two layers that work simultaneously. Together, they ensure the company gets paid twice for the same service while parents and schools each believe the other is the one covering costs.

• Layer 1: District contracts. EZSchoolPay signs Service Agreements with school districts. Districts pay EZSchoolPay set contract amounts for the platform and its services. These are guaranteed annual payments that cover the cost of setting up and running the district-specific implementation of EZSchoolPay’s site.
• Layer 2: Per-transaction junk fees. EZSchoolPay then charges parents a separate flat fee on every single transaction made through the portal. In the New Hartford Central School District, that fee is $2.95 per transaction regardless of the deposit amount.
• The double-dip. Because the district’s contract already pays for platform costs, the per-transaction fee parents pay covers nothing that has not already been covered. The complaint states directly: “in most circumstances, the school districts already pay these companies for their services.”
• The blame shift. EZSchoolPay’s public-facing website tells parents the fee is “charged by your school or school district.” This is knowingly false. EZSchoolPay controls the fee levels unilaterally, can change them at any time, and keeps every dollar.
• The interest harvest. Beyond transaction fees, EZSchoolPay can earn interest on funds sitting in children’s EZSchoolPay accounts, including after the child is no longer enrolled in the district. This revenue stream is not disclosed to parents.
• The exclusivity lock. EZSchoolPay’s contracts with districts are described in the complaint as adhesion contracts that do not permit meaningful negotiation on pricing and prohibit districts from contracting with competing vendors offering cheaper services within the same school.
• The FOIA firewall. If a parent or journalist files a public records request for the contract terms, EZSchoolPay’s standard-form agreement requires the district to invoke trade secret exemptions and deny the request. The contract also permits EZSchoolPay to seek an injunction to stop any disclosure.

Legal Receipts: Straight From the Documents

The following quotes come directly from the class action complaint and from documents cited within it. Nothing is paraphrased. These are the words on record.

“Other than the receipt of payments made by you (less applicable fees charged by us) neither the school district, the school, the school nutrition department, nor any individuals employed by the school district profit from this Service.”

“The student’s school receives the proceeds of all payments less any service fees associated with the transaction.”

“[T]he standard-form Service Agreement that EZSchoolPay enters with a school district states that, if the school district faces an information request under the Freedom of Information Act, 5 U.S.C. § 552 (‘FOIA’) or an analogous state statute such as New York’s Freedom of Information Law (‘FOIL’), the school district must invoke statutory exemptions for trade secrets and confidential commercial or financial information and deny the request.”

“Payment processors like EZSchoolPay charge far more than their processing cost—up to nine times more—to inflate their profits… payment processors like EZSchoolPay charge American families over $100 million each year in Junk Fees.”

“[I]f a parent or family member attempts to fund a single lunch, the Junk Fees increase beyond even the excessive typical levels for such Junk Fees… Plaintiff Dodge would be charged a $2.95 fee for an $8.00 load on her child’s account which represents a massive 36.9% of the entire transaction, which equates to over 41 times that actual cost of the transaction.”

The Fee by the Numbers: What the Data Reveals

The complaint and the CFPB’s 2024 report together provide a documented picture of the financial scale of this scheme.

Societal Impact Mapping: The Damage Beyond One Family’s Wallet

This is a case about school lunch fees, but the documented harms extend across economic inequality and public health in ways that compound over time and across generations.

Public Health

The USDA built the National School Lunch Program in 1946 explicitly as a national security measure to protect the health of children. Every junk fee that reduces food available to a child is a direct interference with that program’s purpose.

• A pre-pandemic survey cited in the complaint found that hungry students demonstrate reduced ability to concentrate, poorer academic performance, and increased behavioral and discipline problems.
• 60% of students from low-income communities report coming to school hungry, according to research cited in the complaint. For these children, a depleted lunch account is not an inconvenience. It is a school day without adequate nutrition.
• Research cited in the complaint shows that access to school breakfasts increases educational attainment scores. Research on the National School Lunch Program shows “sizable” lifetime effects on educational attainment. EZSchoolPay’s fees erode that access directly.
• For families where 60 cents of every dollar deposited goes to EZSchoolPay, the child’s lunch account is receiving 40 cents of nutritional value for every dollar the parent spent. This is a documented diversion of food resources away from children who are nutritionally vulnerable.
• A 2021 Tufts University study cited in the complaint found schools are “the single healthiest place Americans are eating.” Junk fees that make school meals less accessible undermine the one institutional setting where children’s nutritional needs are reliably met.
• The USDA issued guidance in 2010 stating children in school nutrition programs “shall not be charged any additional fees” because such fees “limit access to the program and impose an additional criterion for participation.” EZSchoolPay is a third-party vendor, not a School Food Authority, and has no authorization under USDA guidance to charge these fees at all.

Economic Inequality

EZSchoolPay’s flat fee structure is regressive by design. The less money you deposit, the higher your effective fee rate. The complaint documents this with precision.

• Families eligible for free and reduced-price lunch spend up to sixty cents of every dollar on junk fees, according to the CFPB’s 2024 report. This means the program that exists specifically to help low-income children eat is being taxed most heavily on its most vulnerable users.
• A flat fee of $2.95 on a $50.00 deposit is 5.9% of the transaction. A flat fee of $2.95 on an $8.00 deposit is 36.9% of the transaction. Families who cannot afford to deposit large sums at once, which is the definition of lower-income families, face the highest effective rates.
• Fee-free alternatives, where they technically exist, require physically visiting the school during working hours with cash or a check. For single parents working hourly jobs without flexible schedules, this option is functionally unavailable. Some districts have eliminated cash and check payments entirely, removing the only alternative.
• EZSchoolPay’s exclusivity contracts prevent competing vendors from offering lower-cost services within the same school. Families have no ability to choose a cheaper alternative because EZSchoolPay has contractually closed that market.
• The aggregate annual cost to American families is $100 million per year, per the CFPB. That is $100 million extracted from household budgets, disproportionately from households under financial strain, that could have gone directly to food for children or other household necessities.
• EZSchoolPay can earn interest on funds held in children’s accounts, including after the child has left the school district. Low-income families who did not know about this provision may have left balances in accounts they no longer monitor, generating passive revenue for EZSchoolPay at no cost.
• Eight U.S. Senators identified this scheme in September 2024 as “unacceptable” in a letter to the USDA. The Senate’s specific concern was that processors “snatch[] dollars meant to pay for kids’ school lunches in order to pad their profits,” targeting a practice that senators recognized as extracting money from the least financially protected families.

The “Cost of a Life” Metric

What Now: The Five Legal Fights and Your Next Move

The lawsuit is active. The class is open. The defendants are named. Here is what the complaint demands and where pressure can be applied right now.

The Five Claims Against EZSchoolPay

• Claim 1: NY GBL § 349. New York’s consumer protection statute prohibits deceptive acts or practices in the conduct of any business in the state. The suit alleges EZSchoolPay made false statements about its fees, concealed material facts, and violated USDA policy, all of which constitute deceptive practices under this law. Plaintiff seeks actual damages, treble damages for willful violations, and attorneys’ fees.
• Claim 2: Breach of Contract. EZSchoolPay’s own Terms of Use promised to disclose fees before transactions were finalized. On Auto-Replenish transactions, the money was taken first and notice came via email receipt. That is a material breach.
• Claim 3: Unjust Enrichment. Asserted as an alternative to the breach of contract claim. EZSchoolPay collected fees far in excess of any legitimate service cost while simultaneously being paid by school districts for the same service. The excess must be returned.
• Claim 4: Fraud by Material Omission. EZSchoolPay never disclosed that fee-free payment alternatives existed. Parents who would have chosen a different payment method were denied the information needed to make that choice.
• Claim 5: Breach of Contract (Third-Party Beneficiary). Parents and students are the intended beneficiaries of the contracts between EZSchoolPay and the school districts. By violating Visa’s merchant rules, EZSchoolPay breached those contracts, and the families have standing to sue for that breach.

Key Defendants

• Constellation Software Inc., 66 Wellington Street West, Suite 5300, TD Bank Tower, Toronto, Ontario. The ultimate parent company. Has transacted business in New York without registering as required by state law.
• N. Harris Computer Corporation, 1 Antares Drive, Suite 100, Ottawa, Ontario. NY DOS ID 3995186. Registered agent: United Agent Group Inc., 600 Mamaroneck Avenue #400, Harrison, NY 10528.
• Harris School Solutions, Inc. d/b/a EZSchoolPay. The operating entity. Named in the suit alongside all parent companies to prevent corporate structure defenses.

Regulatory Watchlist

• CFPB (Consumer Financial Protection Bureau). Already issued the 2024 report naming this practice. Has enforcement authority over unfair, deceptive, and abusive acts. File a complaint at consumerfinance.gov/complaint/.
• USDA Food and Nutrition Service. Administers the National School Lunch Program. USDA’s own guidance, issued in 2010 and updated in 2014, prohibits exactly the kind of third-party fee charging that EZSchoolPay operates. Contact fns.usda.gov.
• New York State Department of Education. Administers school lunch programs in New York. Has direct oversight authority over how school districts contract with vendors serving nutrition programs.
• New York State Attorney General. Enforces GBL § 349 and can bring action on behalf of New York consumers. The AG’s office has authority to investigate and pursue civil penalties for the same consumer protection violations alleged in this lawsuit.
• Your U.S. Senators and Representatives. Eight senators have already acted. Constituent pressure works. Call your senator’s office and reference the September 18, 2024 letter to the USDA on school lunch payment processing fees. Ask what they are doing about it now.
• Visa and Mastercard Merchant Compliance. EZSchoolPay is alleged to have violated Visa’s own merchant rules. Visa has a compliance reporting mechanism. If EZSchoolPay has violated the rules it agreed to follow as a merchant, the card networks have the authority to act.

Mutual Aid and Grassroots Resistance

• File FOIL requests with your school district now. Request a full copy of your district’s contract with EZSchoolPay, all fee schedules, and any communications about fee-free payment options. EZSchoolPay’s contract requires districts to deny such requests, but that clause itself is evidence of concealment. The denial is newsworthy. Document it and share it publicly.
• Bring this to your school board meeting. School boards approved these contracts. They can revoke them or demand renegotiation. Show up. Read the CFPB figures aloud. Ask board members on record whether they knew EZSchoolPay was collecting junk fees in addition to their contract payments.
• Connect with the plaintiff’s attorneys. Michael A. Tompkins at Leeds Brown Law, P.C. (mtompkins@leedsbrownlaw.com, (516) 873-9550) and Nicholas A. Colella at Lynch Carpenter LLP (nickc@lcllp.com, 412-322-9243) are counsel for the class. If you are a New York resident who paid EZSchoolPay junk fees in the past six years, you may be a class member. Contact them.
• Share this investigation. The class likely numbers in the tens or hundreds of thousands. Most of those people do not know this lawsuit exists. Every parent you reach is a potential class member who may be owed money.
• Support school meal funding advocacy. Organizations like No Kid Hungry (nokidhungry.org) work specifically on food access in schools. The long-term fix to corporate extraction from school lunch programs is policy that removes payment processors from the cafeteria line entirely, or mandates fee-free alternatives with genuine accessibility.