How Companies Gouge Prison Inmates

Firms line up to be banks, telecom companies for the incarcerated
By Kevin Spak,  Newser Staff
Posted Jun 27, 2014 1:55 PM CDT
How Companies Gouge Prison Inmates

There are many reasons that it sucks to be in prison, but one of them is that it can cost more than eight bucks to make a 15-minute phone call—and private companies are collecting that dough. The New York Times today takes a look at how a new breed of company, fueled by private equity, cashes in on the incarcerated by becoming their de facto banks and telecom providers. And because inmates aren't protected by regulations of any kind, the companies are free to gouge them.

Putting $25 in an inmate's commissary account at one Nashville prison, for example, costs $6.90. In response to uproar, the FCC recently capped interstate calls at 25 cents a minute, but making a 15-minute in-state call at one New Jersey jail costs $8.50. Each email sent outside the prison at one Washington facility costs 33 cents. States don't mind the gouging, because they get an ever-increasing cut on the profits, which, the companies say, drives up prices even more. "It is clear that it drives up the prices," JPay's CEO says. "The commission system should be modified." Click for the full story. (Read more prison stories.)

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