Lawsuit Alleges Excessive Fees on Released Prisoners’ Prepaid Cards
Prison cards are under fire again, this time in Arizona. Bank of America has been named in a proposed class action lawsuit over claims the bank charged excessive fees on prepaid cards issued to former prison inmates in the state. Filed in U.S. District Court in Phoenix, the suit relates to BofA-issued prepaid cards given to inmates upon their release—which are loaded with funds confiscated upon arrest or money earned through in-prison work or family contributions. The suit takes issue with the fact that prisoners have no choice but to take the cards, which are subject to fees, such as $15 to withdraw money at a bank teller window, according to a Reuters report. Bank of America declined to comment on the proposed suit.
This isn’t the first time prison cards have been scrutinized, although industry advocates note that prepaid cards are safer and less expensive for released inmates to use than checks. Earlier this year, a similar lawsuit was filed against JP Morgan Chase over the fees attached to that bank’s federal prison prepaid card program. Chase settled the case in August, agreeing to pay nearly $450,000 to the released prisoners affected by the fee structure, as well as up to $250,000 for fines and court costs. In 2015 a group of 18 U.S. Senators called for the CFPB to create fee protections for the so-called “release cards” issued to ex-prisoners—many of whom don’t have traditional bank accounts and often find it difficult to set up such accounts, the lawmakers noted.