Consumer choice is a key issue in these pending regulations. JPay’s recent merger [with Securus] illustrates that their priority is in securing the ability of hedge funds to profit at the expense of the poorest and most vulnerable members of our society. This re-affirms our efforts to ensure regulations are in place to protect consumers from exploitative products such as their release cards.
In June 2015, JPay filed a rebuttal to the Consumer Financial Protection Bureau regarding a comment by the Human Rights Defense Center (HRDC) on behalf of 68 organizations which addresed the problems with forcing people into financial contracts with the predatory companies which profit off the release debit card industry.
On September 10, 2015, HRDC filed a response to JPay’s rebuttal, addressing their allegations point by point.
The following text is an excerpt from HRDC’s response to JPay’s rebuttal:
How much is the ability to continue financially exploiting prisoners and their families worth toSecurus? At least $250 million – JPay’s purchase price. This illustrates the urgent need for the CFPB to protect prisoners, ex-prisoners and arrestees who are exploited by having release debit cards foisted on them with no choice in the matter.
Consumer choice is a key issue in these pending regulations. JPay’s recent merger illustrates that their priority is in securing the ability of hedge funds to profit at the expense of the poorest and most vulnerable members of our society. This re-affirms our efforts to ensure regulations are in place to protect consumers from exploitive products such as their release cards.
After reviewing contracts and related public records from several states which JPay cites in its ex-parte filing, not only have we been unable to verify statements the company presents in its defense, we have found outright contradictions in the existing contracts obtained by HRDC through public records requests in close proximity to the date of JPay’s ex-parte letter.
For example, on page 4 of its filing, JPay says it has “not charged for customer service and account cancellation in any state for over one year.” Yet current contracts which include fee schedules do not indicate this is the case.
Georgia Department of Corrections (GDOC) contract information provided to HRDC on April 28, 2015 indicates that JPay charges a customer service fee of either $0.25 per minute (automated) or $1.00 per minute (live) for phone calls. If JPay has voluntarily removed this fee over the past year it has not stated that in any amendment to the contract, which the GDOC was required to produce pursuant to our public records request….
The most recent amended JPay contract made available by the Colorado Department of Corrections (CO DOC) also indicates a customer service charge of $.25 if automated and $1.00 for live customer service (not specified as “per minute”). This contract also includes a $1.50 “print statement” fee which is not listed in JPay’s ex-parte letter…
JPay alleged: “In some states, including Florida and Louisiana, no fees apply to activating or using JPay’s release cards.” Additionally, the Louisiana Department of Corrections fee table in the ex-parte letter indicates there are no fees aside from $5.00 for a replacement card, yet the contract language we received from the Louisiana DOC pursuant to a public records request includes a $12.95 “fee per card issued.” … We found no specific mention either way regarding activation fees in Florida’s JPay contract.
These fees could easily amount to a significant cost to release debit card users, particularly if they are not receiving accurate information about the fees they are being assessed for basic functions of debit card use.
Even if JPay has changed or reduced certain fees as alleged – essentially admitting that its prior practices were predatory – the absence of contractual language related to those changes offers no assurance that consumers will be protected in the future.
While the company may not provide kickbacks for its release debit cards, it does so for most of its other services – which serves as an inducement for correctional agencies to “bundle” release cards when they contract with JPay for money transfer services, video visits, email services, etc. Thus, release cards are the proverbial tip of the iceberg. Also, note that with JPay’s purchase by Securus we can expect additional bundling of the combined companies’ contracts and the rapid expansion of the exploitive release debit card model to the 1,600 detention facilities that currently contract with Securus for phone services.
Based on the foregoing and our original comment, we reiterate our request that the CFPB ban the compulsory use of release debit cards for prisoners, arrestees and other detention facility populations, and ban all fees associated with such cards when consumers do opt in to use them. We ask that you consider these matters with respect to the rulemaking to amend Regulation E, Docket No. CFPB-2014-0031, RIN 3170-AA22.