In this video, the Center for Public Integrity and CNBC show us how prison bankers, vendors, and corrections facilities, profit from inmates’ families.
The short documentary “Time is Money” by Eleanor Bell with Daniel Wagner investigates the exploitative practices surrounding service providers in correctional facilities and how they damage low-income families of prisoners. The focus is primarily on the company JPay, which has a near monopoly position in the niche market of prison banking. The collusion and profit sharing between companies like JPay and corrections facilities places a significant strain on low-income families that are already scraping by. Showcased in the video are a few of the families affected by these costs and personal stories of the sacrifices they are forced to make for their loved ones.
Previously, families could send inmates money by mail order, a process which would cost two dollars and a trip to the post office. According to the video, it would take about three days for the money order to be credited to the inmates commissary account. JPay entered the market to make things more efficient, digitizing the process and allowing people to conveniently send money online or through a mobile app using a debit or credit card–for a fee. JPay fees tend to vary depending on what state the prison is located in. There are cases where the rate can approach up to 45 percent of the total being transferred. Beyond these transaction costs, the prison will often take an additional percentage for items such as court fees, medical visits, or mandatory savings accounts. As prison fees begin to accumulate in some accounts, prisoners are left with a negative balance, which discourages loved ones from assisting them.
Linda wanted to buy him a second pair of underwear and socks. But the county’s intake fee and daily “rent” already had put the account about $70 in the red. Linda and her husband both were out of work and couldn’t afford to pay $100 for a pair of underwear.
JPay also offers financial incentives for prisons to adopt their program, offering a sort of “legal kickback,” by which the company will send the prison operator 50 cents to two dollars per transaction. A number of lavish parties and conventions as well as awards for corrections officials are also all explicitly funded by JPay. It is no wonder, then, that for almost forty percent of the prison population, JPay is the only option for their families to send money. The additional costs imposed by companies like this, as well as phone companies, prison store operators and corrections facilities, make it almost impossible to escape poverty with a loved one in prison. Fortunately, we have seen the early stages of regulatory responses to these exploitative markets. In 2013, the FCC finally placed a rate cap on most telephone calls in calls in prisons, acknowledging that people were “making unspeakable sacrifices to stay in touch with their loved ones.” Likewise, JPay’s practices have come under investigation by the New York Department of Financial Services’ consumer division.