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 Legal, 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 (Philadelphia).
Contact Golomb Legalat (215) 278-4449.