Lead plaintiff Jesse Krimes cites a litany of “deceptive, fraudulent and illegal” charges on the debit cards, including $1.50 per month for not using it once every 90 days, and 45 cents to check the balance.
“Chase is the exclusive provider of debit cards issued to federal inmates upon their release from a federal Bureau of Prisons facility,” Krimes says in the Sept. 11 lawsuit.” At the time of release, a federal releasee with a balance in his inmate account is forced to receive funds on a non-reloadable Chase debit card.”
He claims that inmates get a 1-page fee schedule with the card, but do not receive the card’s terms and conditions. For instance, the fee schedule says that ATM withdrawals from non-Chase kiosks are free for each deposit made by the releasee, but fails to disclose that the cards are non-reloadable.
JP Morgan Chase Bank became the exclusive issuer of such debit cards in 2008 through a non-competitive bid process, Krimes claims.
He says the bank uses a loophole in the Electronic Fund Transfer Act, which prohibits distributing employee pay through prepaid debit cards, a restriction with sufficient ambiguity to allow lump sums to escape the law.
The Consumer Financial Protection Bureau proposed amendments to the law in December 2014 to include “government benefits” in items restricted from pre-paid debit cards. But even if the amendment passes, Krimes says, “federal releasees who received the US. debit cards will be one of the few subsets of consumers, if not the only subset, which are not protected by the EFTA.”
Krimes’s lawsuit includes a table comparing the rates Chase charges releasees and other consumers. A replacement card with expedited shipping costs releasees $24.50, but other consumers only $5. Releasees pay $10 fee to get money from a teller window, compared to $0 for others. Others pay $4 to replace a lost card; releasees are charged $7.50.
Krimes seeks class certification, an injunction, disgorgement, rescission and reformation of agreements, and punitive damages for unjust enrichment, conversion, and unfair trade.
He is represented by Ruben Honik with Golomb & Honik.
- No Exit for Sex Offenders in Missouri
- Wisc. Would Criminalize Fetal Cell Research