Organizations call on President Biden and the FTC to end abusive fees charged to incarcerated people and their families
WASHINGTON – Incarcerated people must be included in the broad effort by the Biden administration and the Federal Trade Commission (FTC) to crack down on junk fees, due to their extremely low incomes and the unique constraints of their position as consumers without options, according to a coalition of 29 organizations.
“Junk fees” are hidden charges attached to purchases that customers can’t opt out of and that add no value to transactions. Justice-involved people often can’t avoid them, because they are captive to private companies awarded exclusive contracts by prisons and jails.
“The push by the FTC and the Biden Administration to address junk fees is laudable — and long overdue,” said Caroline Cohn, Equal Justice Works Fellow, sponsored by Nike, Inc., at the National Consumer Law Center. “But one community suffering severe harm from junk fees is often the most overlooked – incarcerated people and their families, who are incurring excessive, unfair, and deceptive fees for essential services.”
In an 18-page joint letter, advocates highlighted some of the most abusive financial practices in prisons and jails and the ways incarcerated people are especially vulnerable to these junk fees. Incarcerated people don’t have the option to use a different service or company, and their ability or inability to pay junk fees can come with dramatic consequences, determining whether they can stay in touch with a loved one or buy food or over-the-counter medications at the commissary. Private companies compete for lucrative contracts with correctional facilities, which often award contracts to the companies that provide them with the highest “site commissions,” otherwise known as kickbacks.
“Companies pass on the cost of these kickback payments directly to incarcerated people and their loved ones, often aggressively inflating prices without fear of competition,” said Mike Wessler of the Prison Policy Initiative. “You can’t comparison shop behind bars. So incarcerated people are either forced to pay the excessive fees or to go without essentials like hygiene products, food, or communication with their loved ones.”
With prison and jail phone rates under increased scrutiny, the companies behind these services have evolved to offer other services, such as electronic messages and use of tablets, that come with unfair and unclear fees that sap money from incarcerated people and their families.
Money plays a more important role than ever in the lives of people in prisons and jails, and facilities and private corporations are capitalizing on it. Families that send money to incarcerated loved ones are being fleeced with steep fees – up to 37% – and a complex pricing structure that makes it hard to know exactly how much it costs to send money.
And the fees don’t stop when an incarcerated person is released. Any funds inmates had in their account—wages earned while behind bars, support from family members, or money the person had in their possession when arrested—often are returned on prepaid debit cards rife with fees, including fees for using the card too much and not enough. Electronic monitoring and court mandated probation can also come with unexpected fees.
“Junk fees are baked into the mass incarceration economy, and these fees fall disproportionately on people of color, and Black women in particular, raising important equity considerations,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “Any effort to address junk fees must include those most vulnerable to them and to their harmful effects – incarcerated people and their support systems who cannot escape them.”