JPMorgan Chase docked over prisoner debit cards

It was a program designed to help prisoners back into society with a bit of cash and a bank account. But according to a class-action lawsuit against JPMorgan Chase, which settled this week, it stung former inmates with a string of unusual and exorbitant charges.

The biggest U.S. bank by assets won a government contract in 2008 to supply former inmates of all federal prisons across the country with a prepaid, non-refillable debit card, which they could use to access money they had earned, or been sent, while behind bars.

But former inmates complained that they were not allowed to review or approve the terms and conditions attached to the cards, which were much tougher than those available to regular customers on the outside. For example, former inmates paid $10 to get money from a teller window, which was a service offered for free to regular cardholders. Chase, JPMorgan’s retail banking arm, would charge former inmates $24.50 to replace a lost card quickly, almost five times the regular fee, and would charge $1.50 if the account was inactive for a month.

Ex-convicts also had to pay 45 cents — perhaps the equivalent of two hours’ labor inside — just to check their account balance.

“This was a ‘take it or leave it’ endeavor,” said Ken Grunfeld, an attorney at Golomb & Honik, a Philadelphia law firm which led the class action. “Talk about a captive audience; these people had to take this card, or their money would be denied to them.”

JPMorgan agreed to pay $446,822 to reimburse thousands of former inmates, according to a filing on Monday in federal court in Philadelphia. The bank also agreed to pay as much as $250,000 in plaintiffs’ fees and costs, the filing said.

[Source: CNBC]