Filed Date: Oct. 19, 2021
Case Ongoing
Clearinghouse coding complete
On October 19, 2021, after a review of their practices by the Consumer Financial Protection Bureau (CFPB), JPay, LLC (a private company that provides financial services to prisons and jails) entered into a consent order with the CFPB. The consent order stated that JPay's marketing, provision, and servicing of prepaid cards given to former inmates upon their release from prison or jail was contrary to several federal statutes. JPay violated 15 U.S.C. §1983 (the Electronic Fund Transfer Act (EFTA)) and Regulation E of the Consumer Financial Protection Act (CFPA) by requiring consumers to establish fee-bearing prepaid accounts as a condition of receipt of a government benefit. The CFPB also found that JPay had engaged in unfair and abusive practices holding the consumers to fee structures that were often ambiguous, misleading, and, in certain instances, not authorized in cardholder agreements.
Accordingly, under §§ 1053 and 1055 of the CFPA, the CFPB issued a consent order requiring JPay, among other things, to (1) give consumers to option of receiving their money through a mechanism other than their prepaid card program, (2) create and provide written disclosures that clearly and prominently inform consumers of their options, (3) cease charging “Covered Fees” to the consumers in the prepaid card program (4) cease charging any fee unless the said fee is clearly disclosed in applicable agreements or documents provided to the consumer, and (5) cease misrepresenting their fee structure as part of the prepaid card program. To enforce this consent order, the CFPB required JPay to develop a Compliance Plan. The CFPB required JPay to pay $4 million in damages to injured consumers and fined them $2 million in civil penalties.
Summary Authors
Richard Cantoral (11/12/2021)
Last updated Aug. 30, 2023, 2:44 p.m.
Docket sheet not available via the Clearinghouse.State / Territory: District of Columbia
Case Type(s):
Key Dates
Filing Date: Oct. 19, 2021
Case Ongoing: Yes
Plaintiffs
Plaintiff Description:
N/A
Plaintiff Type(s):
Non-DOJ federal government plaintiff
Public Interest Lawyer: Yes
Filed Pro Se: No
Class Action Sought: No
Class Action Outcome: Not sought
Defendants
JPay, LLC (Miramar), Private Entity/Person
Case Details
Special Case Type(s):
Available Documents:
Injunctive (or Injunctive-like) Relief
Outcome
Prevailing Party: Plaintiff
Nature of Relief:
Injunction / Injunctive-like Settlement
Source of Relief:
Form of Settlement:
Court Approved Settlement or Consent Decree
Amount Defendant Pays: 6000000000
Content of Injunction:
Issues
General: