Incarcerated people must be at the forefront of Biden Administration and Federal Trade Commission efforts to end “junk fees”
We joined the National Consumer Law Center and 27 other organizations to call on the Federal Trade Commission to crack down on abusive fees incarcerated people and their families are forced to pay.
by Mike Wessler, February 8, 2023
In February 2024, we sent a new comment to the Federal Trade Commission in response to its proposed junk fee rule and its impacts on incarcerated people. You can find this letter and an overview of our comments here.
“Junk fees,” those hidden charges attached to purchases or transactions, are something we’ve all faced. For those outside the prison walls, they are an inconvenience that may force them to find another company to do business with or grumble as they pay more for a product than they expected.
For incarcerated people, though, there is no escape. They don’t have the option to use a different service or company. And their ability or inability to pay these fees often has dramatic consequences, determining whether they can stay in touch with a loved one or buy food at the commissary to supplement the paltry meals the prison provides. And considering the unconscionably low wages they earn for their labor, these fees are no minor inconvenience.
As part of a broader effort by the Biden administration, the Federal Trade Commission (FTC), an independent agency charged with protecting consumers and enforcing antitrust laws, is currently considering new measures to crack down on these fees. This week, along with the National Consumer Law Center and 27 other organizations, we explained to the agency that because of their low incomes and uniquely constrained position as consumers, providing incarcerated people relief from junk fees should be at the top of their list.
In an 18-page joint letter, this coalition highlighted some of the most abusive financial practices in prisons and jails and the ways incarcerated people are especially vulnerable to these junk fees.
Money transfers
As facilities increasingly shift the costs of incarceration to the people who are locked up, money plays a more important role than ever in the lives of people in prisons and jails. They now often have to pay for essentials like hygiene products, food, and paper from the commissary. As a result, many families have to send money to their incarcerated loved ones to help them make these purchases.
Sensing an opportunity for profit, companies have sprung up to facilitate these money transfers. Our 2021 analysis of this industry found that these companies charge steep fees — up to 37% — and have complex pricing structures that make it hard to know exactly how much it’ll cost to send money to your loved one.
These fees are tough to justify at a time when services like Venmo and Zelle make transferring money outside of the prison walls easy and free.
Communication and technological services
As prison and jail phone rates recently came under increased scrutiny, the companies behind these services have evolved to offer new services that have, thus far, largely evaded government regulation and oversight. As these companies moved into these unregulated industries, they packed their products with unfair and unclear fees that sap money from incarcerated people and their loved ones.
- Electronic messaging: In recent years, electronic messaging has exploded in popularity in prisons and jails. While the service has immense potential to strengthen connections between incarcerated people and their loved ones, unreasonably high costs and hidden fees have, thus far, made this yet another way for these companies to reap immense profits off the backs of some of the poorest people in society.
- Tablets: Similarly, so-called “free” tablets offer the promise of maintaining stronger connections to the outside by allowing incarcerated people to access music, videos, and other digital content, but are often little more than a tool to sap money from incarcerated people. For example, one tablet provider charges incarcerated people a $14.99 fee for a 14-day digital music subscription. For comparison, Spotify’s standard price is $9.99 a month, and its most expensive plan, the “family plan” — which provides six accounts that can stream music at the same time — is only $15.99 a month.
Release cards
Even when a person is released, they’re still not free from the exploitative grasp of these companies, thanks to the advent of “release cards.” These prepaid debit cards, which we’ve covered extensively, are often given to people as they leave prison or jail. They’re loaded with any funds they had in their trust account — wages earned while behind bars, support from family members, or money the person had in their possession when arrested.
At first, this may sound like a convenient way to give someone their money when they’re released, until you learn of the complex and costly fees that quickly drain their value. This includes fees for:
- Using your card for a purchase,
- Not using your card recently enough,
- Declined purchases,
- Using your card at the wrong ATM or bank, and
- Closing your account.
Often the only way to avoid these fees is by closing your account almost immediately upon your release, a time when you’re likely to be looking for stable housing and employment — things that are often necessary conditions for someone’s release to be approved.
Other junk fees in the criminal legal system
Our comment goes on to explain that beyond these services, junk fees are baked into the mass incarceration economy, with incarcerated people and their loved ones being subjected to fees for:
- Commercial bail,
- Pretrial diversion programs,
- Private probation,
- Electronic monitoring,
- And more.
This push by the FTC and the Biden Administration to address junk fees is laudable — and long overdue. However, if it is to be successful, they must recognize that you can’t truly address the worst impacts of junk fees without addressing how they harm incarcerated people and their families.
The nearly two million people behind bars (and their loved ones on the outside) are unfairly exploited by corporations and governments every day. Addressing these junk fees will not end this exploitation entirely, but it will be a significant and meaningful step toward economic justice.
Interesting read – thanks for this article. I support your efforts towards prison reform. Yes, the fees are exorbitant. A question on this, however: what is the allocation of those fees? Although some profit goes to companies offering services, don’t most of the fees go back to the intuitions in the “inmate welfare fund”?
Fees deposited to the “inmate welfare fund” support services in prison that are not covered by government or institutional funding. The fund supports things like: recreational facilities, gymnasiums and basketball courts; exercise equipment such as ellipticals and stationary bikes; recreational art space and ceramics kilns; music studios and instruments; TVs, microwaves, game tables, and other amenities that are specifically excluded from government funding but make life bearable for those on the inside. So, discerning what portion of those fees go to the companies providing email/phone services, and how much goes to the “inmate welfare fund” is essential.
Certainly, one solution is to cut those fees IF government funds are allocated for the above. And they should be. But when deposited into the “inmate welfare fund” for programs and services that government funding cannot support (i.e. precluded by law), those high fees are the only mechanism to support a humane, comprehensive living environment for incarcerated individuals.
I welcome your thoughts on this.
Hey Connie,
You’re absolutely right that a lot of the money prisons take in from incarcerated people and their families goes into inmate welfare funds – particularly from phone call rates (see https://www.prisonpolicy.org/phones/state_of_phone_justice_2022.html) and commissary sales (see https://www.prisonpolicy.org/reports/commissary.html). However, the same is not true of most of the fees we talk about in this blog post. As regulations have brought down the cost of phone calls, companies have devised various ways to make more money and recoup their losses, one of which is to charge these bogus fees. Usually, companies do not kick back any revenue to facilities on fees – with the exception of some fees for services on tablet computers (see https://www.prisonpolicy.org/blog/2019/03/07/free-tablets/). Of that, we have no way of knowing how much goes to IWFs.
Thank you for bringing this issue to the forefront. This problem makes it very difficult for families/friends to stay in contact or deliver funds to incarcerated loved ones when the fees are so high. No one should profit off the backs of the incarcerated or their families/friends. No wonder our incarceration rate is higher than any where else in the world. It’s a thriving “business” and echoes of peonage.