Central Bank of Kansas City Sued Over Fee-Loaded Prepaid Debit Cards Issued to Arrestees Upon Release

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A proposed class action lawsuit accuses Central Bank of Kansas City (CBKC) of predatorily issuing prepaid debit cards saddled with service fees as the only way for individuals arrested, detained and released from custody to have confiscated cash returned to them.

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According to the 18-page lawsuit, CBKC, working with non-party Numi Financial, has illegally exploited the “chaotic and confusing times” when someone is arrested, detained and released from custody, a period in which a detention facility will confiscate an individual’s personal property, including cash. The suit says that CBKC, Numi and other vendors have aimed to contract with detention facilities to obtain confiscated money and issue prepaid debit cards that individuals released from custody must accept in order to access their money.

Central Bank of Kansas City and other vendors profit from this arrangement from the service fees charged to involuntary cardholders, who are “provided with no other option for the return of their money,” the case says. If an individual declines to accept a prepaid debit card upon their release from custody, the filing relays, their funds will be deducted through monthly or weekly service fees, “regardless of whether the release card is taken from jail or ever used.”

The lawsuit stresses that CBKC holds and controls the funds loaded onto the prepaid debit cards at issue and knows that card recipients neither requested that their funds be handed over to the bank nor chose the fee-loaded cards for the return of their money. Despite this, the case says, each CBKC prepaid debit card given to released arrestees states that the individual “authorize[d] and request[ed] the return of my funds” on the card.

Further, the copyrighted cardholder agreement CBKC provides when a release card is issued purports to authorize the bank to collect fees and impose other requirements on recipients, yet this agreement was not provided to proposed class members until after their confiscated money was transferred to and under the control of the bank, the funds were loaded onto the card, and the card was activated and ready for use, the lawsuit alleges.

“After illegally issuing activated and validated release cards to involuntary consumers, Defendant CBKC and Numi then took money from those individuals by charging an array of fees ‘authorized’ under the Cardholder Agreement that the consumers never agreed to, including ‘maintenance’ fees, cash withdrawal fees, balance inquiry fees, and the like,” the complaint summarizes. “The releasees never agreed to these fees, and never agreed that Defendant CBKC could take possession of their money. The individuals became involuntary ‘customers’ of Defendant CBKC, paying fees and charges that they never agreed to.”

The suit accuses CBKC of violating the federal Electronic Funds Transfer Act by engaging in a pattern of “unlawful, deceptive, unfair, and unconscionable profiteering” by way of seizing money from releasees and issuing unrequested prepaid debit cards.

The lawsuit looks to cover all persons in the United States who, at any time since April 17, 2023, were taken into custody at a jail, correctional facility, detainment center, or any other law enforcement facility, entitled to the return of money either confiscated from them or remaining in their inmate accounts when released, and issued a prepaid debit card from Central Bank of Kansas City that was subject to fees, charges and restrictions.

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