Exploitation of prisoners and their families leads to huge profits for private companies.
A six-month investigation by the Center for Integrity and CNBC revealed how private for-profit companies monopolize and overcharge inmates and their families for a variety of services.
“The costs imposed by JPay, phone companies, prison store operators and corrections agencies make it far more difficult for poor families to escape poverty so long as they have a loved one in the system,” the Center wrote, according to a report by the Equal Justice Initiative.
JPay Inc., which provides money transfers to more than 1.7 million inmates in 32 states, has collected tens of millions of dollars from inmates’ families. Families used to buy money orders for about $1.25; JPay charges fees up to 45 percent, the report says.
The Center also reported:
In 2013, JPay generated over $50 million in revenue from almost 7 million transactions. JPay sends the prisons a cut of the profits, reportedly between 50 cent to $2.50 for every transaction.
The prison also deducts its own fees and charges before the transferred money is placed in an inmate’s account.
The investigation further found that prisons allow phone and commissary vendors to charge inflated prices in exchange for financial kickbacks as well.
Last year, in response to a petition filed by inmates’ families, the Federal Communication Commission capped rates for many telephone calls under its jurisdiction.
The Alabama Public Service Commission announced its own plan to reduce rates and begin setting caps for inmate calls.
The FCC has put forth a proposal to eliminate prison kickbacks, which the Public Service Commission is resisting.
Government agencies are not only receiving money from these companies, they have passed the cost of incarceration onto the inmate families as well.
In some states, these agencies charge for room and board, electricity, and even toilet paper.
Some inmates’ families also pay for other basic needs such as toothpaste, doctor visits, and winter clothes.
The FCC might have authority to set rates for pay-phone calls, but to force companies like JPay to reduce their fees would be much harder. Financial and consumer protection regulators have less power over pricing that might help families.