On November 14, the Consumer Financial Protection Bureau (CFPB or Bureau) filed a significant consent order against Global Tel Link Corporation (GTL), a company that provides communication and financial services to correctional facilities. The CFPB found that GTL, along with its subsidiaries Telmate, LLC and TouchPay Holdings, LLC, engaged in illegal practices that adversely affected incarcerated individuals and their friends and families.

GTL and its subsidiaries contract with correctional facilities to provide services like money transfers. Friends and family can use the services to deposit money into an incarcerated person’s account, and these funds may then be used to pay for items in the correctional facility’s commissary. Other accounts can be used to pay for telephone services, online messaging, and video visitation.

GTL has a “no-refund” policy for money transfers, with limited exceptions, making it difficult for friends and family to resolve errors such as duplicate transactions or funds sent to the wrong account. These consumers may file chargebacks with their own financial institutions to try to recover the funds. Some consumers were allegedly even instructed by GTL employees to file a chargeback if their dispute could not be resolved. Nonetheless, according to the Bureau, in many cases GTL blocks the account of the incarcerated person from receiving additional transfers via credit card or debit card until someone repays the amount of the chargeback and, in some cases, an additional fee.

Additionally, between 2019 and 2023, the CFPB found that GTL and Telmate emptied funds from 575,000 accounts after a period of inactivity without sufficiently notifying the consumers. The companies also allegedly failed to disclose complete fee schedules for money transfers, depriving consumers of information about how much they would pay for deposits depending on the payment channel, method, or amount deposited.

According to the Bureau, these actions violated the Consumer Financial Protection Act and deprived incarcerated individuals and their families of essential funds needed for basic necessities such as food, medicine, and clothing.

In response, the consent order requires GTL, Telmate, and TouchPay to take several corrective actions:

• Return at Least $2 Million to Harmed Consumers: The companies must repay all fees and chargeback balances paid by friends and family of incarcerated individuals to unblock accounts.
• Pay a $1 Million Penalty: GTL and its subsidiaries will pay a $1 million civil penalty to the CFPB’s victims relief fund.
• Stop Blocking Accounts and Seizing Funds: The companies are prohibited from blocking accounts due to consumer chargebacks and from emptying out and retaining the funds in inactive accounts. They are also required to disclose complete money transfer fee schedules to consumers.

The stipulation filed concurrently indicates that GTL, Telmate, and TouchPay consented to the issuance of the consent order without admitting or denying any wrongdoing.