There are both evil people in this world and ordinary people who make mistakes. Sometimes those people go to jail. Over 99% of those incarcerated are ultimately released. And in Arizona, when they are released they get whatever cash they had at the time of their arrest, commissary money and prison earnings in the form of a Bank of America debit card.
People just being released from prison are extremely vulnerable. Although we tend to ignore the thousands of people serving time in our society, it just makes good sense to help them become productive members of society when they get out. If we don’t, they wind up getting arrested again and the whole cycle repeats itself. Unfortunately, Bank of America may not have received the “good sense” memo. A class action lawsuit just filed this week says they are gouging thousands of former inmates with ridiculous fees.
Bank of America Class Action
Let’s unpack the lawsuit. Filed on November 3rd, the lawsuit seeks monetary damages and a court order stopping Bank of America from overcharging former inmates released by the Arizona Department of Corrections.
The introduction to the lawsuit says of the former prisoners,
“If these individuals want their own money after they are released from prison, they are forced to accept a “consumer relationship” with BofA. As a result of this relationship, BofA issues these individuals a debit card, in connection with which BofA charges them exorbitant and unusual fees once they are released from an Arizona corrections facility. BofA refers to this card as the BofA CashPay Debit Card. The fee structure for the BofA CashPay Debit Card, and other features devised by BofA, by turns dissuades and disincentivizes Arizona releasees from accessing their own money, and penalizes them with excessive or unusual fees when they do.”
So how “exorbitant” are these fees? Plenty!
According to the complaint, there is a $15.00 fee per transaction at a bank teller window. There also is a $2.50 fee to speak with a customer service agent over the telephone. If someone wishes to withdraw money at an ATM, there is a $1.50 charge by Bank of America for each withdrawal, even at an in-network ATM withdrawal. You could be released from prison with $15 bucks but not even able to purchase a bus ticket simply because the bank would charge you that much to find out how much money you had or to visit a teller to withdraw your money.
Some 19,000 inmates are released each year from Arizona prisons. Because the Department of Corrections has an exclusive contract with Bank of America, the inmates have no choice as to how they get their funds back or the terms of the contract. If you or I were charged $15 to simply check our balance, we would probably find a different bank. The former inmates have no choice.
Federal law gives protections to workers who take their pay on debit cards. But there is an exception for one time payments. Since the prison is only giving the inmate a one time payment, they don’t have to follow the law. Nor does the bank. A CFPB proposal to amend the law to include government “benefits” wouldn’t help either since the money in the inmates account is not a benefit.
Lest you think that Bank of America is the only bank to think of this scam, you are wrong. JP Morgan Chase settled similar charges earlier this summer in connection with debit cards issued to former federal Bureau of Prisons inmates. Evil minds evidently think alike. (We are sure that there are a few Wells Fargo execs wondering why they didn’t think of this scam first!)
FIRREA, SEC Whistleblower Programs
Bank employees, compliance officers and even bank executives are coming forward in record numbers to report fraud and help put a stop to bank misconduct and greed. For years, banks were able to muzzle their employees. No more.
Whistleblower anti-retaliation and award statutes are empowering bank workers to come forward in record numbers. The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and the SEC’s Whistleblower Program pays awards to folks with inside information about bank fraud and misconduct. As an added benefit, the SEC program has powerful anti-retaliation provisions. Both FIRREA and the SEC program also have ways to help the whistleblower remain anonymous.
In just the last few years, the whistleblower lawyers at Mahany Law have helped our banking colleagues collect over $100 million in FIRREA and False Claims Act whistleblower awards.
For more information about FIRREA, the SEC Whistleblower Program or earning your own whistleblower award, contact attorney Brian Mahany at or by telephone at (direct). All inquiries protected by the attorney-client privilege and kept confidential.
MahanyLaw – America’s FIRREA Whistleblower Lawyers
*Note the lawsuit against Bank of America was just filed two days ago. Bank of America has not yet answered the complaint and therefore we do not know if they are contesting the accusations.