The CFPB has taken action against Global Tel Link Corporation (GTL) over allegations that the company took millions of dollars from a half-million accounts and blocked money transfers to consumers who are incarcerated. Those prisoners relied on those funds for food, medicine and clothing.

The CFPB is ordering GTL and its subsidiaries to stop the allegedly illegal activity, pay at least $2 million in redress to victims and pay $1 million civil monetary penalty.

GTL is a Virginia-based corporation doing business as ViaPath Technologies; its subsidiaries include limited liability companies Telmate, LLC, based in California, and TouchPay Holdings, LLC, based in Texas.

The companies contracted with correctional facilities across the country to provide money transfer services to incarcerated people and their family and friends.

GTL is often the sole provider of money transfer services in a correctional facility 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,” the CFPB alleged.

The CFPB alleged that GTL engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA) (1) by blocking consumers’ accounts when a money transfer was charged-back, which prevented friends and family consumers from sending, and incarcerated consumers from receiving, funds via debit card or credit card transfer; (2) by requiring friends and family consumers to pay the amount of the chargeback plus, in some circumstances, a fee, to get an account unblocked, even though the friends and family had not filed the chargeback; and (3) by failing to disclose to consumers complete fee schedules for money transfers, depriving consumers of information that would allow them to understand how the payment channel, payment method, or amount they deposit may impact the fee they are charged for the money-transfer transaction.

The CFPB alleged that between 2019 and 2023, GTL and Telmate engaged in abusive acts or practices in violation of the CFPA by emptying and retaining unspent funds from online messaging, video visitation, and telephone services accounts after a period of inactivity without sufficiently notifying the consumers of the practice.