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HRDC Files Class-action Suit Over CDCR Debit Release Cards
by Derek Gilna
The Human Rights Defense Center (HRDC), the parent organization of Prison Legal News, filed a complaint on January 12, 2018 seeking class-action status in the U.S. District Court for the Central District of California. The lawsuit alleges unlawful and exploitative practices by JPay, Inc., Sunrise Banks National Association and the bank’s credit card processor, Praxell Processing, in forcing fee-laden debit cards on prisoners being released from the California Department of Corrections and Rehabilitation (CDCR).
The CDCR is required by statute to provide released offenders with the funds in their prison trust accounts, plus $200 in “gate money” if they have been in custody for more than six months. In the past those funds were returned in the form of a check, but the CDCR now requires all prisoners to receive the money on a prepaid debit card, and JPay has a monopoly contract to provide the cards.
Unfortunately, the fee-laden debit cards have placed yet another burden on offenders struggling to reintegrate into society upon their release. The fees associated with the JPay cards include $1.00 for declined point-of-sale or ATM transactions, $5.00 to replace lost or stolen cards, a $3.00 monthly “maintenance fee” with the first charge being made five days after the card is activated, and a $9.95 cancellation fee. Other charges, such as ATM fees or fees for card balance inquires, may also apply.
In its complaint, HRDC cites examples of several prisoners who were allegedly victimized by the prepaid debit cards, stating that JPay and the other defendants “took full advantage of [the prisoners’] complete lack of bargaining power by requiring [them] to pay various exorbitant, unreasonable fees to retrieve [their] own money and state-issued benefits.”
The complaint also alleges that CDCR employees had “raised concerns that the Cards would not be widely accepted at retailers, as the Cards do not have the cardholder’s name (and releasees do not have state ID cards immediately after release, when they will be most in need of their JPay Card funds) and thus cannot present identification at the point of sale.”
Further, “Defendants have engaged in a pattern of unlawful, deceptive, unfair, and unconscionable profiteering and self-dealing with respect to the prepaid release Cards that they force upon individuals who are released from jails and prisons,” the complaint adds. “In so doing, Defendants have violated the law, including the Fifth Amendment’s prohibition against the taking of property without just compensation, the Electronic Fund Transfer Act, 15 U.S.C. § 1693, et seq. (2010), and the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq., and California’s common law actions for conversion, and trespass to chattels....”
HRDC continues to seek plaintiffs who were forced to accept a JPay debit card upon their release from prison for possible inclusion in the class-action suit. This is the third case that HRDC has filed challenging exploitive debit release cards. See: Reyes v. JPay, Inc., U.S.D.C. (C.D. Cal.), Case No. 2:18-cv-00315-R-MRW.
Related legal case
Reyes v. JPay, Inc.
|Cite||U.S.D.C. (C.D. Cal.), Case No. 2:18-cv-00315-R-MRW|