Despite the rate-capping order, the phone companies’ litigation against the F.C.C.’s efforts to rein in their excessive charges is likely to continue. But even as they fight in court, the companies are dodging oversight by exploiting a system that is largely unregulated: prison financial services.Unless they’ve known someone who’s been incarcerated, most people don’t know that the corrections system has an entire commerce arm of its own. Everything an inmate can buy — phone calls, commissary, copays for substandard medical care, video visitation or the new email service — is purchased through a special account created by the prison or a private company.Merely to add funds to an account, the family or friends of inmates must pay a service fee. I have an account myself with the prison phone giant Securus so that inmates I want to keep in touch with can call me. In February, I’d loaded my phone account without any fee. Then, a few weeks ago, I was charged $6.95 to add $5 of call time. So, the $11.95 that used to buy 49 minutes then purchased only 20.These fees are an additional money grab by the phone companies and the prison commissions system. There’s a fee to create an account, a fee to fund an account, even a fee to get a refund. The companies are also taking advantage of a loophole in the F.C.C. order that allows them to add special fees for single calls by a user who doesn’t want to set up an account with them. For the “PayNow” option from Securus, for example, the call cost is $1.80, but the transaction fee is $13.19. Before the F.C.C.’s order was implemented, ancillary fees added nearly 40 percent to phone call costs for prison customers.
The phone companies’ strategy was clear before the F.C.C.’s rate cap kicked in. Last year, Securus acquired JPay, one of the nation’s largest prison financial services providers. JPay handles financial transactions for 70 percent of prison inmates; its fees are as high as 35 to 45 percent of the money being sent. JPay could potentially charge a fee to create a JPay account to pay the service fee to load a Securus phone account.It’s not just that this system is exploitative and cruel, taking from those who have little enough already. But this profiteering is also imposing costs on society. It’s been established that regular contact between inmates and their friends and family on the outside lowers the rate of reoffending upon release. So, if that contact is rationed because of phone company profiteering, the result is more recidivism.