Case: In the Matter of JPay, LLC

21-00006 | No Court

Filed Date: Oct. 19, 2021

Case Ongoing

Clearinghouse coding complete

Case Summary

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…

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)

Documents in the Clearinghouse

Document
1

21-00006

Consent Order

Oct. 19, 2021

Oct. 19, 2021

Order/Opinion
2

21-00006

Stipulation and Consent to the Issuance of a Consent Order

Oct. 19, 2021

Oct. 19, 2021

Settlement Agreement

Resources

Docket

Last updated May 11, 2022, 8 p.m.

Docket sheet not available via the Clearinghouse.

Case Details

State / Territory: District of Columbia

Case Type(s):

Prison Conditions

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):

Out-of-court

Availably Documents:

Monetary Relief

Injunctive (or Injunctive-like) Relief

Non-settlement Outcome

Outcome

Prevailing Party: Plaintiff

Nature of Relief:

Injunction / Injunctive-like Settlement

Damages

Source of Relief:

Settlement

Form of Settlement:

Court Approved Settlement or Consent Decree

Amount Defendant Pays: 6000000000

Content of Injunction:

Monitor/Master

Monitoring

Recordkeeping

Reporting

Required disclosure

Issues

General:

Fines/Fees/Bail/Bond