University of Michigan Law School
Civil Rights Litigation Clearinghouse
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Case Name In the Matter of JPay, LLC PC-DC-0035
Docket / Court 2021-CFPB-0006 ( No Court )
State/Territory District of Columbia
Case Type(s) Jail Conditions
Prison Conditions
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 ... read more >
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.

Richard Cantoral - 11/12/2021


compress summary

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Issues and Causes of Action
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Issues
Content of Injunction
Monitor/Master
Monitoring
Recordkeeping
Reporting
Required disclosure
General
Fines/Fees/Bail/Bond
Plaintiff Type
Non-DOJ federal government plaintiff
Special Case Type
Out-of-court
Defendant(s) JPay, LLC
Plaintiff Description N/A
Class action status sought No
Class action status outcome Not sought
Filed Pro Se No
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Damages
Injunction / Injunctive-like Settlement
Fine
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Filed 10/19/2021
Case Ongoing Yes
Additional Resources
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  JPay, LLC
Consumer Financial Protection Bureau
Date: Oct. 19, 2021
By: Consumer Financial Protection Bureau
[ Detail ] [ External Link ]

Court Docket(s)
No docket sheet currently in the collection
General Documents
not recorded
10/19/2021
Consent Order [ECF# 1]
PC-DC-0035-0001.pdf | External Link | Detail
not recorded
10/19/2021
Stipulation and Consent to the Issuance of a Consent Order [ECF# 2]
PC-DC-0035-0002.pdf | External Link | Detail

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