JPay, a financial services contractor serving prisons, will pay $6 million in fines and restitution to settle claims brought by the Consumer Financial Protection Bureau that it took advantage of former prisoners by forcing them to pay fees to access their own money (article available here).
JPay, which is owned by the private equity firm Platinum Equity Partners, agreed to pay $2 million in fines, the C.F.P.B. said in an announcement on Tuesday. The company also agreed to return another $4 million to people who were forced to pay fees to access money they were owed, including gifts from friends and relatives, wages earned in prison and state-level benefits meant to help newly released people get back on their feet.
Since 2011, more than 500,000 of the 1.2 million people who received prepaid cards from JPay were forced to pay fees to retrieve their money, the C.F.P.B. said. As part of its agreement with the regulator, JPay agreed last week to stop charging fees to use the prepaid debit cards prisoners are given upon their release. It can now only charge fees if a card has been inactive for more than 90 days.