Prison Industries Profit from Excessive Fees

In a recent article published in Prison Legal News (www.prisonlegalnews.org), Stephen Raher from the Prison Policy Initiative (www.prisonpolicy.org) writes about his investigation into the excessive fees charged for sending prisoners money. All fifty U.S. states charge a fee for loved ones to send money to a prisoner. Yet, these fees are excessively high, compared to industry standards seen in services like Venmo or CashApp. The rates Raher found across the country vary, from 5% to 37% for online transfers. The average fee, he found, is 19% to send $20 and 12% to send $50. 

Michigan, like many states, only offers one option to send money electronically, essentially eliminating competition with its sanctioned monopoly. Michigan contracts with Global TelLink (GTL), one of the top three services nationwide. GTL charges $3.95 (20% by percentage), for transfers starting at $20. Starting at $50, their fee is $6.95 (14% by percentage). In states with competitive options, the transfer fees are less, on average, though still significantly higher than industry standards. 

Some states (I could not confirm if Michigan is among them) receive kickbacks from the services to whom they offer these monopolies. As with excessive telephone and email rates and high commissary prices, excessive money transfer fees are just another example of predatory profiting among some of the most vulnerable populations. Many prisoners come from families who have little to no financial stability. 

While some changes in telephone pricing in prisons and jails has occurred over the last few years, many states are still charging exorbitant fees for families to keep in touch with their incarcerated loved ones. Excessive money transfer fees only worsen the exploitation of families of incarcerated persons. 

Until state governments (and the federal government) stop seeing prisons as job security and profit-making ventures, this sort of exploitation will continue. Legislatures have no incentive to change the rules, and courts have little incentive to enforce existing laws when prisoners and their families are viewed as gap fillers in state budgets. Prison industries ought to be compensated for their services, but their compensation should be reasonable and in line with industry standards, not exploitative. Furthermore, prison industries ought to have competition so they cannot use their government sanctioned monopolies to force consumers to use their services. 

One other major consequence of no competition in prison services is that providers, like GTL and JPay, have little incentive to improve their services. When JPay, the provider of email services to prisoners in Michigan, uses a completely useless problem resolution service, for example, they have no reason to fix it. When their system steals "stamps" or provides the wrong songs that prisoners purchase, they have no incentive to fix the problem. When prisoners are forced to agree to completely unreasonable terms of use agreements just to use the service, it's exploitative. 

GTL provides both phone services, money transfer services, and is now responsible for managing visit scheduling. Yet, their service is antiquated and spotty, at best, and completely broken at worst. Where are these excessively high fees they are charging going? They aren't going to improving their services, that's for sure. 

If prison industries cannot responsibly manage the services they offer prisoners and their families, without exploiting their government sanctioned monopolies, they ought to be replaced. It makes one wonder who else is profiting from these exploitative services that allows them to continue operating under conditions that would shutter their businesses were they to face real competition. Is accountability too much to ask from a department whose job it is to hold people accountable (us prisoners)?