AJC Watchdog: First Alert

Keeping watch on those who hold the public trust and money

Georgia man says debit card stiffed him with hidden fees

You get your money back if you're ever unfortunate enough to get arrested and go to jail. Any cash that was confiscated was stored in a trust fund while you were were held, then given back at your release.

That's a money-making opportunity for companies that have latched on to correctional facilities for captive customers. Now, a Georgia man is suing one of the companies - Stored Value Cards - saying that he got stiffed with high fees when his confiscated funds were returned.

The suit also names a Georgia bank, First Century Bank, as a defendant. Stored Value Cards, which does business as Numi Financial, issued cards through First Century.

In a purported class-action complaint filed Tuesday, Anthony Oliver said that when he was released from jail last year in Savannah, the $958 in his inmate account was returned in a pre-paid debit card issued by Numi Financial. Oliver had no choice over that. He couldn't get a check or the cash. He wasn't given any paperwork on the card.

Later, his lawsuit says, he found out the card came with ATM fees, weekly service fees and purchase transaction fees automatically deducted without his consent. Such fees were negotiated with the jail and the hundreds of other detention facilities that have contracted with Numi to manage inmate funds, the suit says.

The day he got out, Oliver went to a fast food restaurant to eat. Numi collected a $1.50 fee.

Next Oliver went to Verizon to pay his bill. Numi collected $2.95 for the transaction.

The next day, he went to an ATM to get cash. Numi took another $2.95 for the withdrawal.

Then there were the weekly $2.50 maintenance fees. His money was soon gone, and he couldn't log into the account to check what fees were charged because it was no longer active, his lawsuit says.

The suit, filed in federal court in California where Stored Value is based, accuses the company and bank of various violations.

Neither has yet filed responses to the suit.

But in a similar lawsuit filed in Oregon in 2015, the company argued that it wasn't to blame for any damages suffered by those who got the cards. They themselves were to blame, the company has argued.

In the Oregon case, a woman who was arrested at a protest march and jailed for eight hours  alleged that in order to spend the $30.97 that the jail confiscated, she had to pay $6.90 in fees. (The criminal charges against her were later dismissed.) Read more about the case in this article from The Nation: https://www.thenation.com/article/the-financial-firm-that-cornered-the-market-on-jails/

Last August, a judge ruled that her case could proceed, rejecting the defendants' arguments that the fees were permitted under a contract they had with the jail.

In response to the suit, Numi Financial noted that the Oregon county had approved the terms and conditions of its prepaid card program and denied many other allegations.

The company also argues that the woman's claims are barred by an arbitration agreement and should be dismissed. Alleged damages she suffered, if any, "were attributable, in whole or in part, to her own conduct or the conduct of third parties" including the Oregon county's sheriff's department, the company responded.

On March 24, it filed a motion to dismiss the lawsuit. The court hasn't ruled on the motion yet, according to records filed in Pacer.

Some groups also have filed complaints with the Consumer Financial Protection Bureau, asking that correctional facilities be required to provide the option of checks or cash, NBC has reported.


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About the Author

Lois Norder is Senior Editor for Investigations in the newsroom at The Atlanta Journal-Constitution.