JP Morgan Chase & Co. recently agreed to pay $446,822 to thousands
of former inmates released from federal prison to
settle a class action lawsuit. According to the lawsuit, which was filed in a federal court in Philadelphia,
the bank ripped off consumers by charging excessive fees for services,
including a $10 fee to make a withdrawal from a teller window, a $2 fee
for using non-network ATMs, a $0.45 fee for balance inquiries, and a $1.50
account inactivity charge that the bank could not justify in court. The
bank agreed to return the fees charged to inmates under the contract,
and has also agreed to pay up to $250,000 in plaintiff’s attorney
fees and costs.
The plaintiffs were represented by Attorney
David J. Stanoch of Golomb & Honik, P.C.
The complaint accuses JP Morgan of scheming with the Federal Bureau of
Prisons (who was not names in the lawsuit) to exploit releasees from federal
corrections facilities, for whom every penny counts following release
without an immediate source of income. One unidentified former inmate
stated that he left prison with only $120, and because of the late fees
imposed by JP Morgan, he only got to use $70 of that money.
Prisoners Were Given No Choice
According to the September 2015 complaint, inmates released from all U.S.
federal prisons since 2008 were required to get Chase debit cards in order
to receive the balance in their accounts, which included wages from prison
jobs and money sent from family and friends. Prisoners were not given
a choice as to whether or not they wanted to use these cards, and were
not allowed to review or accept the terms and conditions of the cards
under the bank’s no-bid contract.
Setting a Precedent for Future Litigation
The lead plaintiff in the case is unfazed by the relatively small payout
to inmates, stating that it is more about the principal that the bank
should be held accountable for purposefully taking advantage of people.
He has also said that this action has set a precedent for future litigation
for other predatory practices. He noted that while the idea behind the
debit cards was reasonable, the bank’s behavior was nevertheless
predatory and illegal.
The case is
Krimes v. JPMorgan Chase Bank NA, 2:15-cv-05087, U.S. District Court, Eastern District of Pennsylvania
Contact Golomb & Honik, P.C. at (215) 278-4449.