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The US Consumer Financial Protection Bureau (CFPB) has imposed a $3m penalty on Global Tel Link Corporation (GTL) for illegally freezing and draining payments accounts of people who are incarcerated.
The Virginia-based company, which operates as ViaPath Technologies alongside subsidiaries Telmate, LLC and TouchPay Holdings, LLC, serves correctional facilities nationwide by facilitating money transfers for inmates.
The CFPB found that GTL engaged in multiple illegal practices, including freezing accounts — the funds in which are typically used for necessities — draining balances from inactive accounts and withholding critical information about transaction fees.
“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,” commented CFPB director Rohit Chopra.
The CFPB says that between 2019 and 2023, GTL and Telmate systematically emptied funds from accounts that showed no activity for 90 to 180 days, pocketing the money without sufficient notice to consumers.
This policy affected more than 575,000 accounts, depriving incarcerated individuals of resources needed for basic survival, while GTL maintained a restrictive “no-refund” policy, which left family members struggling to resolve issues such as duplicate transactions or errors in deposits.
The CFPB also uncovered that GTL’s representatives often advised consumers to file chargebacks with their banks to recover funds, only for the company to penalise them by freezing the accounts of incarcerated individuals, blocking future money transfers until the chargeback amount, and sometimes an additional fee, was repaid.
Returning fees and changing practices
In its order, the CFPB has accused GTL of violating federal consumer protection laws by engaging in unfair, deceptive and abusive practices.
Specifically, the company blocked accounts after chargebacks, seized funds from inactive accounts without proper disclosure and failed to provide transparent fee schedules for money transfers.
This triggered a lack of transparency that prevented families from understanding the true cost of deposits, which varied depending on payment methods and channels.
As part of the enforcement action, GTL and its subsidiaries must return at least $2m to harmed consumers, covering fees paid by families to unblock accounts and amounts taken from inactive accounts.
The companies are also required to pay a $1m penalty to the CFPB’s victims relief fund.
Beyond financial restitution, GTL is mandated to end the practices of blocking accounts over chargebacks, seizing funds from inactive accounts and withholding information on transfer fees.
