Prisoner Debit Cards Are a Major Scam, Says Human Rights Defense Center

The Lake Worth-based Human Rights Defense Center is urging the federal government to adopt rules that would regulate the practice of issuing debit cards instead of cash or check to prisoners just getting out of captivity. Third-party companies that issue the cards charge exorbitant fees, HRDC says, which heavily impacts just-released prisoners who often don't have much money when they get out.

When prisoners are released, they're supposed to get back the money they came in with and whatever they have left from family and friends upon release. But a common practice these days is for prisons and jails to issue prepaid debit cards to the released prisoner, which come with an array of fees that heavily chip away at what is often already a small amount of funds. The fees vary depending on which company provides the service, but 30 cents per transaction, $15 to cash out the card, $2 just to speak to a live agent, and of course, ridiculous ATM fees, are the norm.

And it gets worse. A lot of prisoners don't have $20 on their cards, so they can't even use an ATM. Also, many prisoners are told to keep the card for 30 to 90 days in case they have money from prison work coming, so they need to pay a monthly service fee just to be able to get money that's already owed to them.

In a letter to the Consumer Financial Protection Bureau that requests the federal agency to regulate the prepaid card practice, HRDC says new rules would give prisoners a better chance at staying out of prison:
“By eliminating the excessive and unnecessary fees associated with the growing trend of compulsory release debit cards, this addition to the rule will substantially improve the lives of the millions of people who leave prisons and jails in hopes of regaining a foothold to establish meaningful participation in their family life and communities. Securing financial stability in the initial days following a prisoner’s release from a detention facility increases the likelihood of their post-release success. HRDC and the undersigned organizations strongly believe, based on centuries of collective experience in criminal justice reform issues, that by including relevant language in the proposed rule, the CFPB will assist in reducing recidivism rates and improving the quality of life for both former prisoners and the communities they are reentering.”
At least 15 states currently use the prepaid debit card service and one of the top providers is Miramar-based JPay, best-known for charging heavy fees for sending money to prisoners around the country.

In Michigan, JPay provides debit card services to the state's prison facilities and charges prisoners “$.50 to check the balance of their release card at an ATM, $2 to withdraw cash, $.70 to make a purchase and $.50 a month in maintenance fees. Even not using the card costs money; doing nothing draws a $2.99 fee after 60 days. To cancel the card, a fee of $9.95 is charged,” according to HRDC.

Other companies that sell debit card services to prisons include JP Morgan/Chase, Bank of America, Access/Keefe, Rapid Financial Solutions, Skylight Financial, US Bank and EZ Exit/MFunds.

Although just-released prisoners seem to be getting a raw deal on the debit card situation, deported immigrants might have it worse. Like prisoners, when undocumented immigrants are deported, they get a debit card with money they came in with and any money they earned from $1 an hour jobs or money sent from family. However, once across the border, they often run into trouble trying to use the card they were issued.

“Mexican officials and staff members for humanitarian agencies on the border are frustrated that deportees continue to arrive from the U.S. with checks that have no value in Mexico. Debit cards can also be useless.,” writes Chicago Sun-Times columnist Marlen Garcia.

With debit cards, they are sometimes not activated properly or don't have enough on them to withdraw from an ATM, Garcia writes. And many people are never able to get their money. For recently deported immigrants, even $20 or $40 bucks can mean a bus ride home. 

You can read HRDC's letter, which was co-signed by several other activist organizations, below: