CFPB Orders Global Tel Link to Pay $3 Million for Illegally Freezing and Draining Payments Accounts for People Who Are Incarcerated

WASHINGTON, D.C. - Today, the Consumer Financial Protection Bureau (CFPB) took action against Global Tel Link Corporation (GTL) for illegally taking millions of dollars from more than a half million accounts and blocking money transfers to consumers who are incarcerated, which the consumers relied on for goods such as food, medicine, and clothing. The CFPB is ordering GTL and its subsidiaries to stop their illegal practices, pay at least $2 million in redress to victims, and pay a $1 million penalty to the CFPB's victims relief fund.

"Global Tel Link took advantage of people who are incarcerated and their families, taking their money and preventing them from receiving money transfers needed to pay for basic necessities," said CFPB Director Rohit Chopra. "People in correctional facilities, along with their family and friends, often have no choice whether to use these products and are exploited by companies that abuse their monopoly power to boost their own profits."

GTL is a Virginia-based corporation doing business as ViaPath Technologies. Its wholly owned subsidiaries include limited liability companies Telmate, LLC, based in California, and TouchPay Holdings, LLC, based in Texas. The companies contract with correctional facilities across the United States to provide various products and services, including money transfer services, to incarcerated people and their family and friends. Friends and family 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. GTL and Telmate also provide accounts to pay for telephone services, online messaging, and video visitation.

GTL is often the sole provider of money transfer services in the correctional facilities where it operates. It has a "no-refund" policy for money transfers, with limited exceptions, which makes it difficult for friends and family to resolve errors such as duplicate transactions or funds sent to the wrong type of account. As a result, these consumers may file chargebacks with their own financial institutions to try to recover their funds. In some cases, GTL's own customer service representatives instruct consumers to file chargebacks. In response, GTL in many cases blocks the account of the person who is incarcerated from receiving additional transfers via credit card or debit card until someone repays the amount of the chargeback and, in some cases in the past, an additional fee.

Additionally, between 2019 and 2023, GTL and Telmate emptied funds from certain consumer accounts after a period of inactivity without sufficiently notifying the consumers. The companies also failed to disclose complete fee schedules for money transfers.

The CFPB found that Global Tel Link and its subsidiaries violated federal law by:

• Blocking consumer accounts and preventing money transfers: GTL and its subsidiaries unfairly froze the accounts of consumers who are incarcerated after a chargeback was filed. Despite having no control over whether the chargeback was filed, individuals who are incarcerated were blocked from receiving additional money transfers via credit or debit card. Friends and family could not send additional funds via credit or debit card until someone repaid the chargeback and in some cases an additional $25 fee, even if that friend or family member did not originally file the chargeback.
• Taking funds from inactive accounts unlawfully: From January 2019 to January 2023, GTL and Telmate had a policy of seizing the account balances in consumers' "unified accounts"-which are used for telephone, video visitation, and messaging services-if the consumer did not make a transaction for 90 or 180 days, taking the funds for their own profit. The companies took funds from approximately 575,000 unified accounts because of this policy, without properly disclosing the inactivity policy or notifying consumers that their funds were about to be taken.
• Hiding fees from consumers: GTL and its subsidiaries did not provide complete fee schedules for their money transfers, depriving consumers of information about how much they would pay for deposits depending on the payment channel (e.g., by phone, online, or at a kiosk), method (e.g., cash, money order, or credit), or amount deposited.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB's order requires GTL, Telmate, and TouchPay to:

• Return at least $2 million to harmed consumers: For those consumers who have not yet received refunds, the companies must repay all fees and chargeback balances paid by friends and family of people who are incarcerated to unblock accounts, despite not having filed chargebacks themselves. It must also return the amounts seized from purportedly inactive unified 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, stop seizing funds from inactive unified accounts, and properly disclose fees: The companies are prohibited from blocking accounts due to consumer chargebacks, prohibited from emptying out and retaining the funds in inactive unified accounts, and required to disclose complete money transfer fee schedules to consumers.

Read today's order.

Consumers can submit complaints about financial products and services by visiting the CFPB's website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected]. To learn more about reporting potential industry misconduct, visit the CFPB's website.