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?