Please Deposit All of Your Money: Kickbacks, Rates and Hidden Fees in the Jail Phone Industry
Questions for Sheriffs and contracting authorities to ask of bidders for phone contracts with a correctional facility
by Drew Kukorowski, Peter Wagner and Leah Sakala
May 8, 2013
This appendix to Please Deposit All of Your Money: Kickbacks, Rates and Hidden Fees in the Jail Phone Industry suggests questions that sheriffs or contracting authorities should ask bidders on correctional facility telephone contracts to ensure that the county is aware of the fees being charged by the vendor, therefore enabling the county to evaluate fees along with the rates, and to ensure the county is properly compensated for any revenue-generating consumer fees that are charged by the vendor.
Fees charged and defining commissions
- What fees do you charge pre-paid account holders and collect call recipients? Please identify any fees charged for account set-up, account funding, per-call or per-month charges, and any fees or limitations on refunds or closing accounts.
- Are commissions to be paid on these fees? If no, why not?
- Are the fees a revenue source for your company or are they cost-recovery in nature?
- If fees are cost-recovery in nature, please describe your efforts to control those costs and the resulting fees.
Fees/Commissions for "Single-Call" and similar programs
- If your bid includes a "single-call" system that allows a single call to be accepted without requiring a preexisting account, please disclose the charges for such calls by payment method (text message, credit/debit card, etc.).
- Please describe whether commissions are to be paid on this fee.
- Please describe your efforts to keep these charges to the consumer as low as possible.
Western Union and money transfer services
- Do you accept payments via Western Union, MoneyGram or similar money transfer services?
- If so, please list the fees charged by those companies to send payments to your company.
- Please include a statement confirming that you do not have a revenue sharing agreement with Western Union, MoneyGram or similar companies, or include a statement disclosing the amount of the revenue share and clarification as to whether this revenue is subject to the commission.
- Please provide a statement as to whether or not you have attempted to encourage Western Union, MoneyGram and similar companies to lower their fees on payments sent to your company, and listing the results of that effort.
Pre-payment of taxes?
- Are any of your pre-payment fees related to the payment of taxes to local, state, or federal authorities?
- If so, please describe in detail how you calculated the amount to be charged during the pre-payment process. Please also describe if and how taxes are paid if deposited funds are not used to make calls.
Monthly and per call charges not covered by commission
- For any monthly and per-call charges not subject to a commission, please describe how you determined the amount to charge callers and account holders.
- Please disclose whether or not you would be willing to offer a report at the end of each contract year that lists both the amount generated from each of these fees or taxes under the contract, and the cash payments made to federal, state or local authorities or to other telecommunications companies that are directly related to the disclosed fee or tax.
Unclaimed funds and refunds:
- When a person is released from custody or transferred to another facility that does not contract with your company for telephone services, can he or she get a refund of his or her pre-paid account funds? Is there a charge imposed or a deadline to request a refund?
- Please describe how you treat funds that are not refunded. Are they turned over to the state unclaimed funds program? If no, are commissions to be paid on that money?
- Are you willing to provide monthly reports on the disposition of unclaimed funds?
Minimizing unnecessary connection charges:
- Three-way calling and call forwarding can be a security problem, but "false positives" that improperly disconnect calls can raise the cost to consumers by requiring a new call to be placed with a new connection charge. Does your bid include technology to detect three-way or forwarded calls?
- If so, does your bid include a connection charge?
- If yes, does your technology give the correctional facility the choice to determine, as a matter of policy, whether such calls should be automatically disconnected, or merely flagged for review by security staff?
- If the correctional facility wishes to have the calls automatically disconnected, does your technology give the correctional facility the choice to prohibit that number from being immediately redialed? Please note that this question inquires about the policy and security flexibility that your technology will give our correctional facility and is not a question about the accuracy of your technology.
Charging fair prices to mobile phones
- Please detail your procedure for connecting to mobile phones: If someone at the correctional facility calls a local number that happens to be a cellphone, under your bid, will he or she be charged different rate than if he or she were to call a local landline?
- If so, to further educate the county about the destinations of calls from its facilities, would you agree to separately disclose the number calls to cell phone and landlines, and the aggregate number of minutes of such calls in your monthly commission reports?
Publication of tariffs
- Please include a statement that if you are awarded this contract, your interstate phone tariffs will be published on your website as required by the FCC.