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Inmates charged fee after leaving jail

After paying their debt to society, released inmates are finding themselves dinged by a hidden fee.

After paying their debt to society, released inmates are finding themselves dinged by a hidden fee.

Prisoners are often given money when they leave jail. It could be the cash they came in with, money they earned at a prison job or funds deposited by friends or relatives. Recently, prepaid debit cards have replaced cash and checks as the way to return these funds to prisoners. Private companies market these cards as a cheaper, more convenient and secure way than checks for the institution to provide funds upon release.

But these cards can come with a cost — one paid by the inmate.

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"So you could go to jail overnight with a $20 bill in your pocket and when you're released the next day, you're given a release debit card and it has a $10 monthly fee," said Aleks Kajstura, legal director at the Prison Policy Initiative.

Paul Wright, director of the Human Rights Defense Center, calls the practice "offensive and unfair" and he describes the fees as "pretty outrageous" - higher than what people pay for similar prepaid cards in the outside world. He wants them banned.

Both groups filed petitions with the Consumer Financial Protection Bureau (CFPB) this week, asking the agency to step in and regulate this little-known marketplace. They want the CFPB to ban all fees associated with these release debit cards, or at least require the correctional facility to provide the option of cash or a check.

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In its petition, the Human Rights Defense Center calls the fees "predatory" because they are not based on the cost of providing the services. These companies are profiting from "a highly vulnerable prison population," they claim.

As proof, they provided this survey published by the Association of State Correctional Administrators last June. It shows the fee structures at 33 agencies that responded:

  • Account maintenance fees as high as $3.50 a week and charged even if there is no activity on the card

  • Balance inquiry fees from 50 cents to $1.50 at an ATM and as much as $3.95 by phone

  • Cash withdrawal at an ATM fees of $2 to $3.50

  • Fees to close the account and refund all the money on the card that range from $9.95 to $30

"By banning fees and providing alternatives, facilities can help prisoners prepare themselves to re-enter society with a greater level of control over the often meager financial resources to which they have access," Wright told NBC News.