Prison Telecom Giant GTL Agrees to $67 Million Settlement in Class-Action Over Inactive Account Seizure Policy
by Anthony W. Accurso
Prison phone services provider Global*Tel Link (GTL) agreed to a settle a long-running class-action on December 20, 2021, with changes to company policies and up to $67 million to compensate customers for seizing funds in any account that remained inactive for 90 days. Though the amount actually paid will likely be much less, GTL will also pay almost $19 million in attorney fees as part of the settlement.
GTL, which changed its name to ViaPath Technologies on January 4, 2022, provides telephone service to prisoners in almost 2,000 prisons and jails spanning all 50 states, holding a monopoly in most, just as its major competitors do. [See: PLN, Sep. 2021, p.12.]
Paying for calls usually occurs in one of three ways: (1) prisoners purchase a prepaid phone card, which incorporates a fee above and beyond the number of minutes covered by the cost of the card; (2) prisoners make “collect” calls, with the call recipient agreeing to pay an exorbitant rate for the call, which gets tacked on to their phone bill; or (3) the cheapest option, which involves the recipient creating an “account” preloaded with some amount of money to cover the cost of the prisoner’s calls.
Family members taking the third option in a jail or prison where GTL/ViaPath holds the monopoly on phone service must either go to the company’s website or call and use its automated interactive-voice response (IVR) system to create an account. The website is filled with more legalese than a mortgage contract, but GTL/ViaPath also oversimplified or even omitted important information about the terms of its prepaid accounts when customers signed up using IVR.
Starting on Apr. 3, 2011, the company implemented a policy of seizing all funds in an account listed as “inactive” for 90 days. Often this occurred when prisoners were transferred from jail to prison, or to a jail where GTL didn’t hold the phone service contract and the contract changed hands. Family members—already caught up in the details of this transition—would often forget to get the unused money back from GTL, assuming they could figure out how to do so later. But when they tried to do so, they were denied a refund.
After ten years with this policy in place, GTL had managed to seize a whopping $96 million from so-called “inactive” accounts.
In March 2014, Benson Githieya—a public defender from Georgia’s DeKalb County—signed up for a prepaid account. The funds in his account were seized after 90 days. Githieya put together a legal complaint, filed in U.S. District Court for the Northern District of Georgia in April 2015, that would become Githieya v. Global Tel Link Corp. The suit was later joined by plaintiffs from South Carolina, establishing that GTL’s policy affected a class of customers nationwide. The Atlanta law firm of Caplan Cobb LLP then took over management of the case on behalf of the plaintiff class, eventually joined by the Decatur firm of Radford & Keebaugh, LLC, as well as Goldstein, Borgen, Dardarian & Ho in Oakland, California.
Eight-year Legal Saga
Over the years, the suit involved getting beyond the required mediation, the establishment of class certification, several depositions, exchanging hundreds of thousands of pages of documents, filing three amended complaints, and defending against an interlocutory appeal to the Eleventh Circuit, before GTL settled the case.
Further, the litigation was complicated by GTL’s attempt to hide how it deceived customers about the seizure policy. In court, GTL repeatedly insisted that IVR’s automated script warned prospective users that “balances that remain unused may expire after 90 days.” Yet plaintiffs uncovered evidence that the disclaimer was removed from IVR in early 2014. That earned the company a sanction from Judge Amy Totenberg, who said GTL’s actions “poisoned” the litigation process. “GTL insisted, over and over again in different variants, that this lie was the truth,” read Totenberg’s November 2020 ruling. [See: PLN, Feb. 2021, p.38.]
Shortly after, GTL agreed to settle the case. As part of the settlement, the company established a $67 million compensation fund to cover payments to class members affected by the firm’s predatory policy. GTL also agreed to pay approximately $250,000 to cover plaintiff’s court fees, expenses, and costs, as well as up to $18,425,000 in attorney fees—bumping its total theoretical settlement cost above $85 million. However, GTL will only pay out the money seized to people who file claims during the claims period and it will pocket the rest.
The fund will compensate class members, specifically customers who “(i) established a prepaid account through GTL’s [IVR] system and (ii) had a positive account balance that was reduced to $0.00 due to account inactivity for 180 days or less on or after April 3, 2011, and through and including October 6, 2021.”
Anyone with a current account that experienced such a seizure will automatically have their account credited. So will any former accountholder who reestablishes an account within two years of the settlement’s approval. Former account holders who do not wish to reestablish their account may submit a claim form to the Settlement Administrator during the applicable period, and they will receive a direct payment in the amount of their loss.
In addition to direct compensation, for the five-year period following the settlement, GTL agreed to several non-monetary conditions. It will increase from 90 to 180 days the amount of time an account must remain inactive before funds are seized, and users will be notified of, and must positively assent to, this policy before creating an account. The practice remains of dubious legality but is somewhat legitimized by the settlement.
Before seizing funds from an account, GTL will also be required to send a text or email notice that includes information about how to obtain a refund. Also, if GTL does seize funds due to inactivity, and the user still has an account, the user can get the money back simply by contacting GTL’s Customer Service.
Finally, in addition to providing “enhanced disclosures” about its policies, GTL agreed to provide training on settlement conditions to its Customer Service staff to facilitate refunds.
“The settlement will allow people in compromised positions inside jails and prisons and who have only one mode of communicating with their loved ones to no longer be victims of corporate greed,” said Githieya.
While this is a modest win for victims, the settlement is not perfect. The plaintiffs prevailed largely because GTL’s customers who signed up using the IVR were not notified about its seizure policy. Customers who signed up via the firm’s website and subsequently lost money to this policy will never get their money back. GTL admitted to taking $96 million from consumers and will likely only pay a tiny fraction of the $67 million it agreed to pay in this settlement as consumers have only 120 days in which to request a refund. The attorney fees paid to class counsel and their own litigation costs however are substantial and real.
And though future customers will receive notification and must affirmatively consent to the policy, this consent is hollow and coerced. Families rarely have a choice about which predatory company is providing phone service where their loved one is being held prisoner. See: Githieya v. Glob. Tel*Link Corp., USDC (N.D. Ga.), Case No. 1:15-CV-00986.
If you or someone you know is entitled to money from this settlement see the ad on page 41 with instructions on how to file a claim.
Additional sources: Atlanta Journal Constitution, CaplanCobb.com
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Related legal case
Githieya v. Glob. Tel*Link Corp.
|Case No. 1:15-cv-986-AT, U.S.D.C. (N.D. Ga.)