NCLC, the Prison Policy Initiative (PPI), and advocate Stephen Raher submitted comments in response to the Federal Trade Commission’s (FTC) Proposed Rule on junk fees. These comments address the Proposed Rule as it would apply to junk fees that affect justice-involved people. Unfortunately, these fees are very common, and they cause particular harm to consumers who are already economically marginalized and are disproportionately people of color.
In our comments, we thank the FTC for proposing a rule that is industry neutral and therefore would apply to private companies that sell consumer goods or services to or for the benefit of incarcerated people and their families. We urge the FTC to promulgate a final rule that remains industry neutral.
After providing a brief overview of junk fees affecting justice-involved people, we respond to many of the specific questions the FTC asks in its Notice of Proposed Rulemaking, including by providing recommendations on how the FTC can strengthen the Proposed Rule. Of note, we explain that if the FTC issued a final rule identical to the Proposed Rule as currently drafted, it would not adequately address many of the junk fees impacting justice-involved people. Rather, prohibitions on excessive fees and fees that provide little or no value to consumers are also essential for alleviating the primary financial harms affecting these consumers. We explain that it is especially critical to prohibit excessive fees in sectors where competition is nonexistent or weak, such as the correctional consumer services sector. While competition might arguably moderate excessive fees in some industries, competition generally does not exist in this context.
Our comments include a map showing fees for prison money-transfer services in all 50 states and a map showing fees for prison electronic-messaging services in all 50 states. We also attach four appendices, which provide additional data on money-transfer and electronic-messaging fees, as well as data on fees for prison debit release cards and tablets.