The Consumer Financial Protection Bureau yesterday announced an enforcement action against Global Tel Link Corporation and its subsidiaries, involving financial penalties totaling $3 million. GTL is required to pay at least $2 million in redress to harmed consumers and a $1 million penalty to the CFPB’s victims relief fund.
What happened: GTL and its subsidiaries, which provide money transfer services to incarcerated individuals, were found to have illegally blocked money transfers and seized funds from inactive accounts without proper notice.
- Blocking accounts: GTL blocked incarcerated individuals from receiving money transfers if a family member or friend filed a chargeback, even if that person was not the original sender. Accounts were blocked until the chargeback amount and, in some cases, an additional fee were repaid.
- Seizing funds: Between 2019 and 2023, GTL and Telmate, LLC seized funds from approximately 575,000 consumer accounts deemed inactive, taking over $4.2 million without sufficient notice to account holders.
- Hidden fees: GTL did not disclose complete fee schedules for money transfers, leaving consumers unaware of how different payment methods and channels could affect their transaction costs.
What they’re saying: “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.”
The bottom line: GTL must now change its practices to prevent blocking accounts due to chargebacks, cease seizing funds from inactive accounts, and clearly disclose all fees for its services.
