A million here, a million there, and pretty soon you’re talking real money: Class-action settlement reveals Global Tel*Link’s addiction to seizing customer money

Evidence from court case shows why the FCC should act to stop abusive practices in the industry.

by Stephen Raher, September 7, 2022

On August 30, a federal court in Georgia approved a settlement in the years-long class action lawsuit against Global Tel*Link Corporation (“GTL”), one of the two major providers of phone services in prisons and jails. This litigation challenged GTL’s policy of seizing customer money from “prepaid accounts” after a short period of inactivity. Just as important, though, it shows why the FCC needs to take action to end this type of abusive practice throughout the industry.

Under the terms of the settlement, GTL will provide cash payments to some customers, account credits to others, and will institute a uniform policy of not seizing customer funds until accounts have been inactive for a minimum of 180 days. GTL has also agreed to implement procedures to warn customers before their accounts are declared inactive. Prison Policy Initiative filed an amicus brief in the case, pointing out certain ambiguities in the settlement agreement — our concerns were addressed by the addition of clarifying language in the court order approving the settlement.

One of the more interesting facts revealed in the case came at the very end — just days before the final hearing, the court denied GTL’s request to keep secret the amount of money it has taken from “inactive” accounts over the years. Although the court allowed GTL to keep such amounts secret for recent periods (specifically, September 2021 onward), we now know that from April 2011 through August 2019, GTL took over $121 million from customer accounts that it declared inactive — this averages to over $1.2 million a month. This isn’t money that GTL earned in return for providing a service, it’s simply money that GTL took because it could.

We have pointed out this shocking figure to the FCC, along with a request to enact rules that would prohibit companies from taking funds like this. Even though GTL has agreed to some reforms as a result of the class-action settlement, other telecom companies can and do seize customer funds in a similar manner, and no company should be able to enrich itself by taking money simply because a customer hasn’t made a call in recent months.


Information about the settlement

Although the deadline to file a claim for cash payments has passed, customers with active or reactivated accounts are still eligible to receive credits. See the official class website at https://gtlprepaidsettlement.com/FAQ.

Stephen Raher was General Counsel at the Prison Policy Initiative. (Other articles | Full bio | Contact)

2 responses:

  1. Terrie Coleman says:

    Thanks so much, because a lot of us had no where to turn. Because as you well know, it’s very, if not almost impossible to seek help from the state which is the agressor, especially if you reside, and receive services in that state, but I’m satisfied with the results. I feel that Justice was served. Bye Now

  2. Cora Mosley says:

    I have had a pre-paid account with GTL for many, many years. They closed the first account but refunded my money prior to the terms of the recent lawsuit.

    I opened another account the first of this year and last used in on July 4, 2022. However, learned yesterday, October, 2, 2022, that this account was also at zero balance. Which means that it was closed prior to the 90 days. A contact with GTL customer service today confirmed that my recent account had been closed, even though the 90 days had not expired which not end until October 4, 2022–tomorrow. I was promised a refund within 30 days.

    My point is that it appears that GTL has not remediated it practices. They are still closing accounts illegally.

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