I need your help. I co-founded the Prison Policy Initiative to put the problem of mass incarceration — and the perverse incentives that fuel it — on the national agenda. Over the last 17 years, our campaigns have protected our democracy from the prison system and protected the poorest families in this country from the predatory prison telephone industry. Our reports untangle the statistics and recruit new allies.

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—Peter Wagner, Executive DirectorDonate

Prison phone giant Securus cashes in, raises fees

While the FCC drags its feet on regulating the prison phone industry, the industry is wasting no time raking in the profits.

by Peter Wagner, September 5, 2013

While the Federal Communications Commission (FCC) drags its feet on regulating the prison phone industry, an industry leader is wasting no time raking in the profits. Just this week, Securus, the second largest company in the prison phone industry, has quietly raised some of its fees.

In our report, Please Deposit All of Your Money: Kickbacks, Rates, and Hidden Fees in the Jail Phone Industry, we wrote that the companies’ hidden fees can double the price of a call. Unlike the regular phone industry, these companies want their money upfront, and they charge additional fees to take, hold, and refund families’ money.

Securus, for example, didn’t think it was enough to charge a family $7.95 to accept a deposit via the web or over the telephone. Now, the company charges $9.95 to deposit money with a credit card over the phone. The company charges this same higher rate regardless of whether you speak to a customer service agent or use the automated system. (By contrast, I can’t think of a business that I use regularly that charges me a fee to take my money. Generally, companies absorb those costs because they want my business. Because this industry has its customers locked in (pun intended), they don’t have to worry as much about competition. But Securus is clearly out of line compared to its competitors. The prison phone company PayTel, which has none of Securus’ economies of scale, charges $3.00 for an automated payment and $5.95 for payments made via a live operator.)

Securus has another, hidden profit-boost as well. Buried in its long list of questionable monthly charges is an increase in one: Securus is keeping the bill processing charge ($1.49/month), Billing Statement Fee ($3.49/month), Federal Regulatory Recovery Fee ($3.49/month), USF Administrative Fee ($1.00/month) and increasing the “Wireless Administration Fee” from $2.99/month to $3.99 a month.

Food for thought: Is Securus raising its fees because it wants to raise every dollar it can now, before the FCC rules take effect, or does this have to do with the recent sale of the company from one investment bank (Castle Harlan) to another (ABRY Partners)? I note that competitor NCIC, which isn’t owned by an investment bank, lowered some fees after our report brought public attention to fees.

Bonus question: Are any sheriffs out there aware that these fees are not commissionable and that their partner Securus just increased its corporate profits at local taxpayers’ expense?

Extra bonus question: Is the FCC aware of what the industry is doing while we wait for the publication of the order to regulate the industry?


10 responses:

  1. […] can’t think of a business that I use regularly that charges me a fee to take my money,” wrote Peter Wagner, the executive director of the non-profit group. “Generally, companies absorb those costs […]

  2. […] can’t think of a business that I use regularly that charges me a fee to take my money,” wrote Peter Wagner, the executive director of the non-profit group. “Generally, companies absorb those costs […]

  3. […] in the few weeks since the FCC has voted to regulate the prison phone industry Securus has actually raised its deposit fees even higher. Now, instead of costing $7.95 to make a deposit over the phone, Securus charges […]

  4. Marilee says:

    I know many people in prison whodo not have support. Thsy also make between 5.00-10.00 a month. This raising of fees is criminal. It is taking advantage of the dis advantaged.

  5. Carolyn Streeter says:

    Totally unfair for the unfair practices Securus is using. Phone contact with the inmates is so very important to keep the atmosphere in the prison facilities at the best level possible to keep injuries at a minimum and to help with the control needed. Fortunately I do not deal with Securus since another phone service is in the area where I do make contacts. Contact with inmates who have children is especially important for the children and the parent.

  6. Bonnie says:

    I would like to know what prisons and visiting rooms the Securus people saw cell phones , ect. I know of none where that would be allowed. Also, while there, did he notice any handicapped people in wheel chairs, in particular elderly , who thru no fault of theirs, are just trying to visit a loved one and at the same time abide by all the rules placed upon such vistors. My husband and I are senior citizens and find it very hard to survive on social security. We find it very hard to travel for hours to visit him. I have to make all kinds of preperations before I set out due to my husbands conditions. The fees that we get slammed with from every direction are so distressing, it takes a terrible tole on our physical, emotional and finaincel well being. I don’t know if we will survive to see him free. The phone bill is just one aspect of having someone incarcerated. Everytime we send him a little money fees are taken from that. It has all turned into a revenue producing avenue for anyone envolved in running the prison systems not just here but world wide.

  7. JW says:

    I never knew that prices were set and based on how many cell phones or what type of car one drove. If this was the case, shouldn’t these companies be paying more taxes? I find it very ironic that they don’t think they should pay more taxes based on the type of car they drive, size house they own or their over the top life style. Because a civilized society is based on fairness and not greed, we need regulatory agencies such as the FCC.

  8. […] the same prison phone company that recently raised their exorbitant fees even higher, recently took steps to bolster their still unregulated “single call” […]

  9. andreas broach says:

    What can we do to have this company investigated and shut down. Its ridiculous how much phone calls cost from a jail here in new Mexico. I think securus is a bunch of crap. I want to know if its even a government owned company and if not. Then why are these phones associated with our jail and prisons? Its time we change this. Don’t you think.

  10. Felicita Luna says:

    Securus outright stole money from my debit card and never gave me the services I paid for.

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