JPay Fined for Preying on Prisoners

Consumer Bureau Takes Action Against Predatory Tactics

Imagine being forced to pay a fee just to access your own money. Or, being forced to sign up for a specific debit card in order to access funds you need when you are released from prison. This card, of course, then charges outrageous fees to someone already facing challenging circumstances. The business model — creating a monopoly on prison financial transactions and preying on victims with no other options — is how JPay earns profits.

Now, however, JPay faces not only Consumer Bureau fines but also strict restrictions on the fees it can charge.

The Consumer Financial Protection Bureau (CFPB) announced the penalties today.

“JPay siphoned off taxpayer supported benefits intended to help people transitioning out of the corrections system,” said CFPB Director Rohit Chopra. “JPay exploited its captive customer base to charge unfair fees that harmed the newly released and their families.”

In summary, JPay violated the Consumer Financial Protection Act (CFPA) by charging consumers fees to access their own money on prepaid debit cards that consumers were forced to use. JPay also violated the Electronic Fund Transfer Act (EFTA) when it required consumers to sign up for a JPay debit card as a condition of receiving government benefits — in particular, “gate money,” which is money provided under state law to help people meet their essential needs as they are released…