February 8, 2023
Via regulations.gov
Federal Trade Commission
Office of the Secretary
600 Pennsylvania Ave. NW, Suite CC-5610 (Annex B)
Washington, DC 20580
Re: Unfair or Deceptive Fees ANPR, R207011
The undersigned civil rights, consumer rights, faith-based, criminal justice, and reentry
organizations respectfully submit the following comments in response to the Federal Trade
Commission’s (“Commission” or “FTC”) Advance Notice of Proposed Rulemaking (“ANPR”)
regarding unfair or deceptive fees, R207011. 1 These comments discuss junk fees affecting
justice-involved people.2 We urge the Commission to identify and confront the unfair and
deceptive fees that are all too common in the correctional services sector of the economy, and to
keep the needs of this often-overlooked population in mind when analyzing the information
collected as part of this proceeding.
We devote our comments to junk fees imposed in the following private correctional services
contexts because they represent some of the most egregious and widespread examples of these
fees: (1) money-transfer services; (2) release cards; and (3) various technology services
increasingly prevalent in correctional institutions—including technologies incarcerated people
use to communicate with their loved ones. We also briefly discuss fees associated with several
other services in this sector—namely, commercial bail, post-arrest/pretrial diversion programs,
private probation, and electronic monitoring—which we recommend the FTC further investigate.
Finally, we explain how oligopolistic dynamics characterize the corrections market more
broadly, which further fosters junk fees.
I.

Background on Unfair and Deceptive Fees in the Private Corrections Industry

In the ANPR, the Commission expresses concern about “unfair or deceptive fees that are charged
for goods or services that have little or no added value to the consumer.” 3 The Commission has
noted that “[c]onsumers may be forced to pay [such] junk fees because they have no way to
avoid or opt out of them;” for example, if they are “dealing with a company with a monopoly or

Fed. Trade Comm’n, ANPR, 87 Fed. Reg. 67412 (Nov. 8, 2022).
Our comments draw heavily on comments submitted by Stephen Raher on behalf of the Prison
Policy Initiative in response to the Consumer Financial Protection Bureau’s Request for
Information on junk fees. See Prison Policy Initiative, Comment Letter in Docket No. CFPB2022-0003 (Apr. 11, 2022), available at https://www.regulations.gov/comment/CFPB-20220003-2517.
3 87 Fed. Reg. at 67413; see also 87 Fed. Reg. at 67416 (requesting input on practices involving
“billing or charging consumers for fees, interest, goods, services, or programs that have little or
no added value to the consumer”).
1
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1

exclusive rights that can extract fees because there is no competing option.”4 This dynamic
precisely describes the services forced upon incarcerated people and their families. Indeed, as the
Consumer Financial Protection Bureau (“CFPB”) recently acknowledged in a January 2022
report, fairness and transparency “seldom appear in the markets for products and services that
capitalize off the criminal justice system, where firms may enter into exclusive relationships with
government actors, rather than competing on the basis of consumer choices.” 5
Private companies are often able to secure the exclusive relationships the CFPB describes by
making large kickback payments, often called “site commissions,” to correctional facilities.
More specifically, private companies compete with one another for a contract to provide services
in a given correctional facility by offering to make kickback payments. The higher the kickback
payment, the more attractive the company’s offer is to the correctional facility. In exchange, the
company requires the correctional facility to make it the exclusive provider of the contracted
service. This secures for the company what is, in many cases, a literally “captive market.”
Companies pass on the costs of these kickback payments directly to consumers—here,
incarcerated people and their loved ones. They do so by aggressively inflating prices and
charging excessive fees, which the exclusive terms of their contracts allow them to do without
fear of competition. Excessive fees both pad the company’s profits and help finance the large
kickback payments to the corrections agency. But they cause substantial, unavoidable harm to
consumers least able to afford these high costs—harm that is not “outweighed by countervailing
benefits to [these] consumers or to competition.”6
Industry actors may assert that site commissions are used to fund programs for incarcerated
people and that, therefore, the fees they charge ultimately benefit incarcerated consumers.
Industry actors have made such arguments in the correctional telecommunications context. As
the Federal Communications Commission (“FCC”) has found in that context, site commissions
are frequently used for purposes completely unrelated to the welfare of incarcerated people. The
FCC explained: “[w]hile the record indicates that site commission payments sometimes fund
inmate health and welfare programs, . . . such payments are also used for non-inmate needs,
including employee salaries and benefits, equipment, building renewal funds, states’ general
revenue funds, and personnel training.”7 In the instances when some site commission money is
supposed to be allocated toward “Inmate Welfare Funds,” the amount that directly benefits

Fed. Trade Comm’n, “Federal Trade Commission Explores Rule Cracking Down on Junk
Fees” (Oct. 20, 2022), available at https://www.ftc.gov/news-events/news/pressreleases/2022/10/federal-trade-commission-explores-rule-cracking-down-junk-fees.
5 Consumer Fin. Prot. Bureau, Justice-Involved Individuals and the Consumer Financial
Marketplace 3 (2022), available at https://www.consumerfinance.gov/data-research/researchreports/justice-involved-individuals-consumer-financial-marketplace/.
6 15 U.S.C. § 45(n) (defining an unfair act or practice, for purposes of the Federal Trade
Commission Act, as one that is “likely to cause substantial injury to consumers which is not
reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to
consumers or to competition”).
7 In the Matter of Rates for Interstate Inmate Calling Servs., 28 F.C.C. Rcd. 14107, 14125 (2013)
(emphasis added).
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incarcerated people may be minimal. 8 Based on its findings, and despite the arguments of the
private telecommunications companies, the FCC mandated that “site commission payments . . .
may not be passed on to inmates and their friends and families”9 and “encourage[d] more states
to eliminate” them.10 We encourage the FTC to consider the careful factfinding and reasoning of
the FCC when weighing any alleged benefits that site commissions and the excessive fees that
fund them may have against the substantial harms they impose.
Unfair and deceptive fees in the corrections industry raise especially grave consumer-protection
concerns for at least three reasons. First, incarcerated people have especially limited financial
resources: the median income among people entering prison is 41 percent less than the national
average,11 and people have virtually no ability to earn meaningful wages while they are
incarcerated.12 Second, the financial cost of supporting incarcerated family members tends to fall
disproportionately on people of color, and Black women in particular, raising important equity
considerations.13 Third, as noted, governments have the ability to award private companies
monopoly contracts for essential goods and services in correctional institutions. This power
creates a heightened obligation on the part of the government to ensure fair treatment of
consumers.
II.

Incarcerated People and Their Loved Ones Are Forced to Pay Junk Fees for a
Variety of Correctional Services

A. Money-Transfer Services Are Frequently Accompanied by Unfair and Deceptive Fees
Correctional facilities are supposed to provide a basic level of subsistence to people who are
incarcerated. But fiscal austerity and mass incarceration have combined to put intense downward
pressure on public spending for any goods or services that directly benefit incarcerated people.
This requires incarcerated people’s loved ones to pick up the slack by sending in money for basic

Id. at 14110 n.13 (“Petitioners point out that in Orange County, California, the Inmate Welfare
Fund had a budget of $5,016,429 in 2010, and of that amount 74% were used for staff salaries,
0.8% was used for the actual services, supplies, and training for inmate education programs, and
0.06% as used for services, supplies, and training for inmate reentry programs.”).
9 Id. at 14111–12.
10 Id. at 14173.
11 Bernadette Rabuy & Daniel Kopf, Prison Policy Initiative, Prisons of Poverty: Uncovering the
Pre-Incarceration Incomes of the Imprisoned (2015), available at
https://www.prisonpolicy.org/reports/income.html (“We found that, in 2014 dollars, incarcerated
people had a median annual income of $19,185 prior to their incarceration, which is 41% less
than nonincarcerated people of similar ages.”).
12 Wendy Sawyer, How Much Do Incarcerated People Earn in Each State?, Prison Policy
Initiative (Apr. 10, 2017), available at https://www.prisonpolicy.org/blog/2017/04/10/wages/.
(showing average hourly wages of 14¢ to 63¢ for typical prison jobs).
13 Saneta deVuono-powell, et al., Ella Baker Center for Human Rights, Who Pays? The True
Cost of Incarceration on Families 9 (2015), available at https://ellabakercenter.org/who-pays-thetrue-cost-of-incarceration-on-families/.
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necessities, such as hygiene products, food, and paper from the commissary.14 Sending money to
someone in prison or jail typically requires dealing with a private company that handles money
transfers,15 and the fees charged for such services are often unfair, deceptive, or both.
1. Unfair Fees
Fees for money transfers to incarcerated people are a prime example of fees that are unfair
because they are charged for services that provide “little or no added value to the consumer.”16
The Prison Policy Initiative (“PPI”), a non-profit, non-partisan organization, recently reviewed
the money-transfer setups in all state prisons and found that these fees are alarmingly high. The
average is around 20 percent of the principal amount in 26 states that issue monopoly contracts;
the highest fees observed were 37 percent.17 By comparison, services like Venmo, CashApp,
Paypal, and Zelle often provide free automated clearing house (“ACH”) transfers from bank
accounts (correctional money-transfer companies do not offer an ACH option), and they offer
transfers from a credit or debit card either for free or for a typical fee of 3 percent or less.18
These stark pricing differences between free-world and correctional money-transfer services are
the somewhat predictable result of a market failure. The monopoly contracts awarded to
correctional money-transfer services like JPay allow these companies to impose non-cost-based
fees on a captive customer base without fear of competition. There are some limited instances of
consumer choice in prison money transfers (discussed in Part II.A.2, below). But average fees in
jurisdictions that allow competition are still only slightly lower than in other jurisdictions.
The massive disparity between fees for money-transfer services inside versus outside of the
correctional sector become even more difficult to justify when one considers that correctional
money-transfer companies seem to have an easier job than their free-world counterparts.
Whereas a service like Venmo must facilitate transfers between two large groups of customers
(senders and recipients) and manage the resulting complexities that can arise in either group
14

Incarcerated people obtain many necessities of life at the commissary, a retail outlet that is
often operated by a for-profit contractor. Commissary is where people can buy necessary hygiene
products and over-the-counter medications; purchase basic supplies like paper, batteries, and
small appliances; and supplement the low-quality, too-small, and possibly spoiled or rotten food
served in the cafeteria. Ariel Nelson & Stephen Raher, Captive Consumers:
How government agencies and private companies trap and profit off incarcerated people and
their loved ones, Inquest (Mar. 19, 2022), available at https://inquest.org/captive-consumers/.
15 See Worth Rises, The Prison Industry: How It Started. How It Works. How It Harms 61–62,
available at
https://static1.squarespace.com/static/58e127cb1b10e31ed45b20f4/t/621682209bb0457a2d6d5cf
a/1645642294912/The+Prison+Industry+How+It+Started+How+It+Works+and+How+It+Harms
+December+2020.pdf.
16 87 Fed. Reg. at 67413.
17 Stephen Raher & Tiana Herring, Show Me the Money: Tracking the Companies that Have a
Lock on Sending Funds to Incarcerated People, Prison Policy Initiative (Nov. 9, 2021), available
at https://www.prisonpolicy.org/blog/2021/11/09/moneytransfers/.
18 Id.
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(from errors or disputes), a correctional money-transfer service has only one recipient to deal
with under any given contract (the correctional agency that awarded the contract).
The conclusion of this evidence is clear: users of money-transfer services in correctional
institutions pay fees far in excess of the cost of the service they receive.
2. Deceptive Fees
The majority of states grant monopoly franchises to money-transfer companies operating in state
prisons.19 About eleven states, however, allow consumers to choose between multiple
companies. But even if competition can theoretically benefit users by encouraging lower prices,20
the information that companies provide about their fees is often so confusing that consumers
cannot easily determine which company offers the lowest-cost option. Of the states with multiple
options, only one (Arizona) provides comparative fee information in one location so that
consumers can consult a single source to calculate the lowest-cost service.21
Confusing pricing not only makes choosing between competing companies difficult, but also
makes choosing between money-transfer services offered by a single company more challenging.
This is because fees for money transfers are often expressed in complicated tiered structures. For
example, the average fee for a $50 online transfer is $5.99, or 12 percent of the principal amount;
but, as the principal amount declines, the fee increases on a percentage basis: the average fee for
a $20 online transfer is $3.75 (20 percent of the principal).22
B. The Release Card Industry Is Also Replete with Junk Fees
When people leave prison or jail, so does their money. Upon leaving custody, people often have
money left in their inmate trust account23—whether from accumulated earnings; support from
family; or, in the case of a short-term jail stay, a return of whatever cash they had in their
possession when arrested. In the past, people received their money in the form of cash or a
check. But, working in concert with private-equity backed financial services firms, correctional
facilities have increasingly given released people their money in the form of a prepaid debit card,
19

Id.
As noted above, average fees in facilities that allow competition are still only slightly lower
than in other jurisdictions.
21 See Ariz. Dep’t of Corr., “Inmate Deposits” (last visited Nov. 28, 2022), available at
https://corrections.az.gov/constituent-services/inmate-deposits.
22 This description of “average fees” focuses on fees for online money transfers. Fees for inperson payments or phone payments are usually higher.
23 As PPI has explained, “trust account” is a term of art in the correctional sector, referring to a
pooled bank account that holds funds for incarcerated people whose individual balances are
sometimes treated as subaccounts. The term “trust” is used because the correctional facility
typically holds the account as trustee, for the benefit of the individual beneficiaries (or
subaccount holders). See, e.g., Wanda Bertram, The CFPB’s Enforcement Order Against Prison
Profiteer JPay, Explained, Prison Policy Initiative, n.1 (Oct. 28, 2021), available at
https://www.prisonpolicy.org/blog/2021/10/28/cfpb-jpay/#lf-fnref:1.
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known in correctional circles as a “release card.” 24 Fees associated with release cards are often
outrageous, with the card provider charging people for things like having an account, using the
account, not using the account, and seeking customer service.
Private correctional companies engaged in similar abusive practices in the telecommunications
context. In that context, the FCC found that prison telecommunications providers were
“assess[ing] a wide range of separate charges for services ancillary to the provision of [inmate
calling services], such as fees to open, fund, maintain, close, or refund an [calling] account,” as
well dozens of other ancillary fees.25 The FCC identified the few ancillary service charges it
found appropriate and banned all others. 26 The unjust fees that private companies once charged
in the telecommunications context are very similar to the fees they are now attempting to charge
for services not regulated by the FCC—such as release cards. Just as the FCC took action to ban
unjust and unreasonable fees in that sphere, so too should the FTC use its authority to act here.
Recent action by the CFPB provides additional support for the FTC to take strong action in this
area. The CFPB recently found that a leading release-card company, JPay, violated federal
consumer protection laws by, among other things, abusing its monopoly contracts to impose fees
on captive consumers who had no way to avoid them.27 The CFPB required JPay to pay $4
million for consumer redress and a $2 million civil money penalty, 28 and negotiated a settlement
Stephen Raher, Insufficient Funds: How Prison and Jail “Release Cards” Perpetuate the
Cycle of Poverty, Prison Policy Initiative (May 3, 2022), available at
https://www.prisonpolicy.org/blog/2022/05/03/releasecards/; see also Worth Rises, supra note
15 at 59, 62–63.
25 In the Matter of Rates for Interstate Inmate Calling Servs., 30 F.C.C. Rcd. 12763, 12838 n.519
(2015); see also id. at 12839 (“Our Mandatory Data Collection confirmed that various ICS
providers charge a plethora of ancillary service charges[.]”).
26 Id. at 12839, 12770 (listing “permitted ancillary service charges and taxes” in Table 2 and
stating that all other ancillary service charges are prohibited); see also id. at 12763–64 (FCC’s
cost-benefit analysis regarding ancillary service charges).
27 The CFPB found that JPay “abused its market dominance” by
24

charg[ing] consumers unavoidable fees for prepaid cards used to return money
owed to consumers at the time of their release from incarceration. Consumers
could not protect their interests in the selection and use of JPay’s cards because
they were denied a choice on how their own money would be given to them upon
release. JPay did not provide a reasonable way for consumers to close their card
accounts to obtain their card balances without paying fees. By assessing fees on
these captive consumers, JPay took advantage of them and caused harm.
Consumer Fin. Prot. Bureau, “CFPB Penalizes JPay for Siphoning Taxpayer-Funded Benefits
Intended to Help People Re-enter Society After Incarceration: JPay Will Pay $6 Million in
Consumer Redress and Penalties” (Oct. 19, 2021), available at
https://www.consumerfinance.gov/about-us/newsroom/cfpb-penalizes-jpay-for-siphoningtaxpayer-funded-benefits-intended-to-help-people-re-enter-society-after-incarceration/.
28 Id.
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whereby the company agreed to not charge most types of fees for five years. 29 Private litigants
have also had success challenging release-card fees,30 and have even managed to defeat
some arbitration provisions given the practical inability of cardholders to avoid using the debit
cards that are foisted upon them. 31 Despite these recent successes, the release-card industry
remains replete with junk fees.
1. Unfair Fees
All release-card fees are a matter of concern because people leaving incarceration often do not
have a realistic ability to get their own money back through an alternative mechanism.
Nonetheless, some types of fees stand out as particularly unreasonable because they do not
appear to compensate card issuers for real costs, making them the type of unfair junk fee the
Commission is concerned with in this ANPR. We discuss the most objectionable of these fees
below. The analysis below is based on a survey that PPI conducted of release-card fees and
contractual provisions.32
•

Purchase fees. Although card issuers do incur some costs to process payment
transactions, they are already compensated for these costs through “interchange fees,”
which are fees the merchant’s bank pays to the card issuer’s bank. Collecting fee revenue
from cardholders for processing purchase transactions thus appears to be a form of
double recovery.

•

Declined-purchase fees. Twenty-four release cards (half of PPI’s data set) charge fees for
declined transactions, with an average fee amount of 62¢. These fees are especially
difficult to justify because no available evidence indicates that card issuers incur any
costs when a transaction is declined. Accordingly, these fees appear to be nothing more
than enrichment at the expense of consumers who are least able to absorb these costs.

•

Periodic maintenance fees. Because interchange fees compensate card issuers for the cost
of processing transactions, periodic account maintenance fees also seem unnecessary.
Card issuers already enjoy interest-free use of unspent cardholder funds, so it is not clear
why cardholders should pay a fee for the mere existence of their account.

29

Bertram, supra note 23.
Danica Brown v. Stored Value Cards, Inc., 953 F.3d 567 (9th Cir. 2020).
31 Grace Bennett, Comment, Mandatory Arbitration and Prison Services Contracts: How Private
Companies Exploit the Incarcerated and Consumers to Reject Meaningful Accountability, 5
UCLA Crim. L.J. 201–05 (2021), available at http://dx.doi.org/10.5070/CJ85154812.
32 Using records in the CFPB’s prepaid product agreements database (the “Database”), PPI
collected fee disclosures for all active prepaid cards that: (1) were marked with the product-type
code “prison release,” or (2) were associated with known release-card issuers, marketers, or
program managers. Using these parameters, PPI examined documents for forty-eight active
release cards issued by five different financial institutions. For fee information compiled by this
survey, see Prison Policy Initiative Comments, supra note 2 at Ex. 2.
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Of particular concern is the prevalence of weekly maintenance fees in the release-card
market. Of the forty-eight cards in PPI’s data set, eighteen (38%) charge monthly
maintenance fees, while sixteen (33%) charge weekly maintenance fees. While the
average monthly fee is $4.01, the average weekly fee is $2.25. Thus, the average
cardholder with a weekly-fee card would pay $9 in maintenance fees per month—more
than twice the average monthly cost for cards with monthly fees. While we believe that
all release-card maintenance fees are unfair as a normative matter, weekly fees are
particularly odious because they appear to be used for purposes of making the total cost
of having an account seem smaller.
•

Account closure fees. Cards issued by Central Bank of Kansas City (and managed by
Numi Financial) feature a $9.95 fee for closing an account and receiving a check. The
nature and amount of this fee is particularly puzzling, given that the same issuer’s
standard cardholder agreement claims that cardholders can transfer their remaining
balance via ACH for no fee at all. With average ACH fees topping off at around $2 for a
typical consumer transaction, it is difficult to understand why this issuer would charge
nothing for ACH transfers but nearly $10 for a check payment that costs 58¢ (the current
cost of a first-class postage) plus the de minimis cost of printing a check. Perhaps the nofee ACH option is the card issuer’s attempt to appear reasonable while resting
comfortably in the knowledge that a majority of cardholders are unbanked and therefore
will not be able to use this feature.

•

Customer service. Thankfully, fees for accessing live customer service agents have
apparently fallen out of favor. Nonetheless, we would support any effort to categorically
prohibit such fees on any type of prepaid card.

Finally, research has shown that consumers use prepaid cards most effectively when they
schedule regular value loads. 33 This allows unbanked consumers to actually derive convenience
and value from some prepaid cards. 34 But no release cards in PPI’s survey allow consumers to
make additional value loads after the card is first issued. Furthermore, PPI’s research reveals that
many features of these release cards render them decidedly inconvenient for users.35 For
example, one issuer’s cardholder agreement states that cardholders can perform in-person
withdrawals only at a “MasterCard principal financial institution,” but provides no information
about how to determine which institutions fall into this category. 36 These observations raise the
33

Stephanie M. Wilshusen, et al., Fed. Reserve Bank of Phila., Payment Cards Center,
“Consumers’ Use of Prepaid Cards: A Transaction-Based Analysis” 25–26 (2012), available at
https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/discussion-papers/D2012-August-Prepaid.pdf (finding significantly greater consumer utilization of prepaid debit
cards when consumer schedules a regular value load; based on a review of more than 3 million
prepaid cards).
34 Jennifer Romich, Sarah Gordon & Eric Waithaka, Indiana State Univ., A Tool for Getting By
or Getting Ahead? Consumers’ View on Prepaid Cards 12–13 (2009), available at
https://ideas.repec.org/p/nfi/nfiwps/2009-wp-09.html.
35 See Prison Policy Initiative Comments, supra note 2.
36 Id. at 10.
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question of whether most of these release cards—at least in their current state—provide any
value at all to consumers leaving incarceration, or instead are simply vehicles for extracting fees
from a population that has no viable alternative for accessing their own money.
2. Deceptive Fees
People released from jail frequently complain that jail staff do not provide them with copies of
cardholder agreements and fee disclosures for their release cards. Accordingly, fees associated
with release cards fall into the FTC’s definition of fees that are deceptive “because they are
disclosed only at a later stage in the consumer’s purchasing process or not at all.”37
Even if release-card companies cannot entirely be faulted for jail employees’ delinquency, they
are certainly responsible for hiding their fees from consumers by failing to comply with federal
disclosure requirements. More specifically, the CFPB requires card issuers to submit prepaid
account agreements and legally-mandated fee disclosures to an online database.38 Database
entries include “names of other relevant parties . . . such as the employer for a payroll card or the
agency for a government benefit program.” 39 In the case of a release card, the correctional
agency clearly qualifies as a “relevant party” for purposes of this rule. Yet numerous release-card
entries in the database fail to identify any relevant parties, which can result in obscured fees. If,
for example, a person released from jail receives a release card issued by Central Bank of Kansas
City and managed by Numi Financial but is not provided with a copy of the cardholder
agreement and fee disclosures, they might visit the CFPB’s website to find this information in
the database. If this hypothetical cardholder looks up release cards issued by Central Bank of
Kansas City, they will find nineteen different release cards with vastly different fee schedules.
None of the entries list a relevant party, and the cards are only identified by alphanumeric
designations that have no inherent meaning (version 1B, 1C, 3B, etc.). By failing to link specific
cards to specific correctional agencies, release-card companies prevent cardholders from
determining which fees govern their release cards.
C. Captive Consumers Are Increasingly Forced to Pay Junk Fees for Technology Services,
Including Services Used to Communicate with Their Loved Ones
The FCC has been making progress in regulating abusive add-on—or so-called ancillary—fees
for “services” related to prison and jail phone calls (e.g., fees to open an account, have an
account, add money to an account, and close an account).40 The FCC has banned or capped many

37

87 Fed. Reg. at 67412 (emphasis added).
12 C.F.R. § 1005.19.
39 12 C.F.R. § 1005.19(b)(1)(i).
40 See, e.g., Peter Wagner & Alexi Jones, Prison Policy Initiative, State of Phone Justice: Local
Jails, State Prisons, and Private Phone Providers, n.2 (2019), available at
https://www.prisonpolicy.org/phones/state_of_phone_justice.html.
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of these fees.41 And it continues to engage in rulemaking to further protect consumers from
unjust add-on fees.42
But phone calls are not the only technology plagued by junk fees. And while the recently passed
Martha Wright-Reed Just & Reasonable Communications Act of 2022 expands the FCC’s
authority to address the price of various communications services for incarcerated people, the
law appears to exclude electronic messaging and focuses on services that permit incarcerated
people to “communicat[e] with individuals outside the correctional institution,” therefore leaving
ample room for the FTC to act.43 As consumer protections around phone calls have become
stronger, prison telecommunications companies have evolved to evade regulation.44 Telecom
companies have bought up competitors that provide services like electronic messaging (i.e.,
email) and various programs delivered on personal tablets.45 These technologies are significantly

Fed. Comm’cns Comm’n, “Telephone Service for Incarcerated Individuals” (Dec. 20, 2022),
available at https://www.fcc.gov/consumers/guides/telephone-service-incarcerated-individuals;
see also Wagner & Jones, supra note 40 at n.12; supra Part II.B.
42 See, e.g., Martha Wright-Reed Just and Reasonable Communications Act of 2022, S. 1541,
Public Law No: 117-338 (ordering the FCC to promulgate regulations to ensure, inter alia, that
all rates and charges for telephone services in correctional and detention facilities are “just and
reasonable”); Fed. Commc’ns Comm’n, Fourth Report and Order and Sixth Further Notice of
Proposed Rulemaking, FCC 22-76, at 37–38 (Sept. 30, 2022) (e.g., capping fees charged by
third-party money transmitters—such as Western Union and MoneyGram—to $5.95); Fed.
Comm’cns Comm’n, PR, 87 Fed. Reg. 219 (Nov. 15, 2022), available at
https://www.govinfo.gov/content/pkg/FR-2022-11-15/pdf/2022-24597.pdf.
43 Martha Wright-Reed Just and Reasonable Communications Act of 2022, S. 1541, Public Law
No: 117-338, § 2(a)(2), (b)(3).
44 In 2015, the year after the FCC’s first rate caps went into effect, the Huffington Post—citing
internal Securus documents—reported that Securus was purchasing JPay because its non-phone
products offered “faster-growing revenue streams” than phone calls. Peter Wagner & Wanda
Bertram, Prison Policy Initiative, State of Phone Justice 2022: The Problem, the Progress, and
What’s Next, n.20 (2022), available at
https://www.prisonpolicy.org/phones/state_of_phone_justice_2022.html (citing Ben Walsh,
Prisoners Pay Millions To Call Loved Ones Every Year. Now This Company Wants Even More,
Huffington Post (Jun. 10, 2015), available at https://www.huffpost.com/entry/prison-phoneprofits_n_7552464.
45
Aventiv Technologies, the corporate parent of Securus, explains on its website that Securus is
“continuing [its] transformation from a traditional corrections telecommunications service
provider to a diversified technology company” that provides products and services “across
multiple sectors.” Aventiv is now the corporate parent of Securus, JPay, and AllPaid, whose
combined correctional products and services span communications, security, entertainment,
education, money transfers, release cards, parole and probation payments, tablets, and more.
Aventiv, “Securus Technologies Realigns Business Units, Diversifies Product Offerings Under
New Corporate Parent: Aventiv Technologies” (Oct. 10, 2019), available at
https://www.aventiv.com/securus-technologies-realigns-business-units-diversifies-productofferings-under-new-corporate-parent-aventiv-technologies/.
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less regulated—and, unsurprisingly, attended by numerous junk fees. We describe the fees
associated with these technologies in the sections below.
1. Email Services
a. Unfair Fees
As with other correctional services, companies that provide electronic messaging services in
prisons and jails are able to abuse their monopoly contracts with correctional facilities by
charging high fees to captive consumers who have no way to avoid them. Fees for emails are
particularly unreasonable because they do not appear to compensate electronic-messaging
companies for real costs or provide consumers with added value. Accordingly, they are the type
of unfair junk fee the Commission is concerned with in this ANPR.
Unlike in the free world, where there is no incremental cost for each email you send or receive,
with prison-based electronic messaging services, there is almost always a fee. According to a
comprehensive 2016 report published by PPI, users most often must pay a flat fee per message.46
At the majority of facilities, fees tend to be in the neighborhood of 50¢ per message.47 PPI,
however, discovered fees for text-only messages ranging from a low of 5¢ per message to a high
of $1.25.48 Some systems offer the ability to send pictures or other attachments for a separate,
usually higher, fee.49 The most notable exception to flat-fee pricing is the Federal Bureau of
Prison’s TRULINCS system, which charges a per-minute fee for use of the system.50
PPI concluded that the wide range of fees suggests that prices are not based on provider costs.51
This is not surprising, it reasoned, given the fact that electronic messaging services typically take
advantage of hardware that is already installed for other purposes (e.g., commissary ordering or
video calls) and the costs to operate a closed electronic messaging network are likely quite
low.52
Further, PPI surmised, the fact that many facilities offer electronic messaging at 50¢ per message
suggests that prices are likely set with an eye toward the cost of the most similar competing
product: a single-piece first-class letter.53 Indeed, JPay expressly admits to setting rates in
relation to postage prices, and refers to prepaid message credits as “stamps.”54 Postage rates are
Stephen Raher, Prison Policy Initiative, You’ve Got Mail: The Promise of Cyber
Communication in Prisons and the Need for Regulation (2016), available at
https://www.prisonpolicy.org/messaging/report.html [hereinafter “You’ve Got Mail”].
47 Id.
48 Id.
49 Id.
50 Id.
51 Id.
52 Id.
53 Id.
54 JPay, “Inmate Services: Email” (last accessed Jan. 26, 2023), available at
https://www.jpay.com/pemessages.aspx (explaining that “each email requires a ‘Stamp,’ often
46

11

legally required to cover the U.S. Postal Service’s direct and indirect costs of delivering firstclass mail,55 however, which is something that has absolutely no relevance to the cost of
providing electronic messaging services in correctional facilities. Put simply, “stamps” in this
context are a sham.
Various ancillary fees can also significantly increase out-of-pocket costs for consumers.56 For
example, one email provider—InmateCanteen.com, operated by Turnkey Corrections—requires
users to make advance deposits, which at the time of PPI’s study were subject to a flat $8.95
“convenience fee.”57 InmateCanteen.com’s “conditions of use” from 2020 explain that it
“charges a flat processing fee for each payment instruction processed by InmateCanteen.com,”
and it “reserves the right to change the amount of the processing fee at any time, without notice
to users.”58 (The “conditions of use” webpage on InmateCanteen.com’s current website is
entirely blank.59) PPI also found examples of email providers charging “maintenance fees” once
a user made a deposit and charging fees for each deposit made.60
Finally, some providers incentivize—and sometimes even require—users to pre-purchase
messages in certain message-quantities or dollar-amounts.61 As PPI explains,
[t]he primary problem with incentivizing or requiring customers to prepay for
electronic messaging service is that fees are nearly always non-refundable. In the
case of a jail, where a person’s period of incarceration can be brief, it is likely that
many family members sign up for the service to communicate with a particular
relative in jail. When that relative is released, there will probably be unused funds
in the account. Given the churn of people through county jails . . . , it seems that
messaging providers count on customers forfeiting unused funds as part of their
business model[.]62
available at more affordable rates than traditional postage”); see also JPay, “Buying Stamps”
(last accessed Jan. 26, 2023), available at
https://www.jpay.com/jpayhelp/Content/products%20and%20services/Email/Buying%20stamps.
htm.
55 You’ve Got Mail, supra note 46 (citing 39 U.S.C. § 3622(c)(2)).
56 Id.
57 Id.
58 Inmate Canteen, “Conditions of Use” (last updated Sept. 25, 2020), available at
https://inmatecanteen.com/Contact/ConditionsOfUse.aspx.
59
Inmate Canteen, “Terms of Service” (last updated Mar. 30, 2022; last visited Jan. 25, 2023),
available at https://team3.inmatecanteen.com/#/policies.
60 You’ve Got Mail, supra note 46.
61 PPI found that at least two companies—ICSolutions and JPay—charge differently depending
on how many messages a customer pre-purchases. ICSolutions offers a single-message price, and
it offers discounts for pre-purchases of multiple messages, up to forty. JPay, in some of its
contracts, requires customers to prepay for at least five messages. Tech Friends (JailATM) and
Smart Communications (SmartJailMail.com) both require users to prepay (at least $5 at a time),
but do not use volume discounts. Id.
62 Id.
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In sum, electronic messaging appears to suffer from many of the same perverse pricing dynamics
that spurred the FCC to regulate phone rates and fees in corrections facilities, including prices
that bear little relation to cost and consumer choice vested in corrections officials who are not
obliged to protect the rights of end-users (a particularly vulnerable population).63 The FTC
should similarly take action to regulate junk fees in the correctional email context.
b. Deceptive Fees
Fees for electronic messaging services in prisons and jails are often hidden. Ancillary fees are
often disclosed only at the time of purchase—which, as explained in the ANPR, can prevent
consumers from knowing the true cost of their purchase until they have already invested
substantial time and energy, can cause them to spend more than they expected or wanted to, and
can force honest businesses to compete on an unfair playing field.64 More specifically, these fees
are not mentioned in the facility contracts or in the providers’ publicly available terms and
conditions. Moreover, it is difficult to directly compare prices between providers because
message bundles, volume discounts, ancillary fees, and character limits 65 make dollar-to-dollar
comparisons unreliable.
2. Tablets
Tablet computers have become increasingly popular in correctional facilities nationwide, and
they have become a means for people who are incarcerated to send emails, make phone or video
calls, listen to music, read e-books, and more. Unfortunately, they have also become a means of
delivering a captive market to profit-seeking companies who charge unfair and deceptive fees.
a. Unfair Fees
Tablets come with hefty price tags due to large fees charged to users at every opportunity. Many
tablet programs, for example, charge users a per-minute fee to read e-books, send messages, or
listen to music.66 One tablet provider charges $14.99 for a 14-day digital music subscription,
including a $9 “infrastructure charge.”67 In some cases, these costly options are being used to
replace free ones. Pennsylvania, for example, ended book donations to incarcerated people in
favor of pricy e-books, many of which were lifted directly from a free online library.68 And one
63

Id.
87 Fed. Reg. at 67422.
65 Electronic message providers often limit message length, with every letter, period, and space
counting against the limit. Limits can be as high as 6,000 characters or as low as 1,500
characters. PPI provides a helpful illustration of how these limits operate in practice: If a user
wants to send Martin Luther King Jr.’s “Letter from a Birmingham Jail,” it would take twentyseven separate messages under a 1,500-character limit. As noted, users are typically charged on a
per-message basis, so this user would be charged for twenty-seven messages.
66 Nelson & Raher, supra note 14; Mack Finkel & Wanda Bertram, More States Are Signing
Harmful “Free Prison Tablet” Contracts, Prison Policy Initiative (Mar. 7, 2019; updated Mar.
28, 2021), available at https://www.prisonpolicy.org/blog/2019/03/07/free-tablets/.
67 Id.
68 Id.
64

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large Florida jail even took away Bibles, replacing them with low-quality e-Bibles on tablets.69
Once again, incarcerated people and their families are defenseless against these unfair fees due to
the monopolistic dynamics at work: “they have no way to avoid or opt out of them” because they
are “dealing with a company with . . . exclusive rights that can extract fees because there is no
competing option.”70
b. Deceptive Fees
Tablet companies and correctional facilities often market tablets as being “free,” and describe
them as a “gift” to incarcerated people. In reality, tablet companies are very effective at hiding
their products’ costs. As a recent experience in New York State showed, some companies are so
successful in hiding their fees that legislators are unable to find them.71 In 2018, JPay signed
a contract with the New York Department of Corrections to give “free” tablets to 52,000
incarcerated people.72 Confused, one Republican legislator asked: “If it’s this easy to encourage
vendors to provide free tablets to inmates, why aren’t they being provided to our students?” 73
PPI was able to discover the true cost of these tablets only by filing a public records request. 74 It
found that JPay provides “free” tablets as part of a package deal—or a “bundled contract”—of
several JPay products and services that gouge incarcerated people and their families. These
include many of the same products and services already discussed, such as selling “stamps” for
emails, charging fees for depositing money, and charging above-market prices for things like ebooks. We discuss these bundling practices, and how they help companies hide their fees, in
greater detail in Part III, below.
D. The Commission Should Investigate High Fees Charged in Markets for Other
Correctional Services
Although the specifics of the services and abuses vary, common features across the correctional
services industry create an environment ripe for consumer abuses and financial exploitation. We
encourage the Commission to closely scrutinize the high fees charged in connection with the
following correctional services:
•

Commercial bail. Commercial bail companies commonly levy fees for various (often
ambiguous) expenses, beyond the bond premium itself. When entering into these contracts,

69

Id.
Fed. Trade Comm’n, “Federal Trade Commission Explores Rule Cracking Down on Junk
Fees: Agency seeks comment on harms from unnecessary, unavoidable, or surprise charges that
inflate costs while adding little to no value” (Oct. 20, 2022), available at
https://www.ftc.gov/news-events/news/press-releases/2022/10/federal-trade-commissionexplores-rule-cracking-down-junk-fees.
71 Wanda Bertram & Peter Wagner, How to Spot the Hidden Costs in a “No-Cost” Tablet
Contract: There’s No Such Thing as a Free Lunch—or a Free Tablet, Prison Policy Initiative
(July 24, 2018), available at https://www.prisonpolicy.org/blog/2018/07/24/no-cost-contract/.
72 Id.
73 Id.
74 Id.
70

14

the consumer has almost zero bargaining power. Contracts are negotiated at the bail agent’s
office—and an accused person who does not sign the agreement under the proffered terms
can be taken back to jail. Bail agents have little incentive to ensure that consumers
understand the terms to which they are agreeing. Furthermore, many bail agents allow the
consumer to pay for the bond premium in installments, often in return for charging financing
fees and costs. The terms and cost of this extension of credit may be murky and devoid of the
types of disclosures typically required in consumer contracts. In addition, financing costs
may cause the premiums to exceed the jurisdiction’s rate cap. 75 All of this occurs against a
backdrop in which these companies have increasingly escaped any financial risk by carving
out loopholes to place that burden on the backs of their customers and the taxpayers.76
•

Post-arrest/pretrial diversion programs. Post-arrest diversion programs come in different
forms, but typically allow—at the state’s discretion—selected individuals to avoid criminal
charges if they follow a prescribed program of treatment, restitution, or community service.
These programs can often have much to recommend them. But recent investigations have
revealed a troubling new pattern: jurisdictions often outsource pretrial diversion programs to
private companies that charge excessive participation fees and operate beyond public
scrutiny. These fees can be substantial, particularly for low-income families. A ProPublica
investigation found that course fees in Illinois ranged from $125 to $175; administrative fees
added another $25 to $35. Companies also charge additional fees for conveniences like
rescheduling a missed class—or even enrolling in a payment plan. 77

•

Private probation. Several states allow counties and municipalities to contract with private
companies to administer their probation systems for misdemeanor and lower offenses. Under
these arrangements, the government extends exclusive contracts to supervision companies,
which are then allowed to enforce probation requirements against people ordered to
probation. Electronic monitoring fees (discussed in the next bullet point) are a major source
of revenue for private probation companies. Other common fees are payments for drug
testing, rehabilitative courses, and other treatment programs. These conditions are sometimes
required not by courts but by the private probation company.
These supervisory systems lack transparency, both to consumers and to the public at large.
The prices for their supervision “services” often vary widely, even within the same state, and
are billed to consumers with little clarity or explanation. Consumers are also frequently

Brian Highsmith, Nat’l Consumer L. Ctr., Commercialized (In)justice: Consumer Abuses in
the Bail and Corrections Industry 26 (2019), available at https://www.nclc.org/wpcontent/uploads/2022/09/report-commercialized-injustice.pdf (internal citations omitted).
76 Wendy Sawyer, All Profit, No Risk: How the Bail Industry Exploits the Legal System, Prison
Policy Initiative (October 4, 2022), available at https://www.prisonpolicy.org/reports/bail.html.
77 Id. at 27–28 (citing Rebecca Burns, Diversion Programs Say They Offer a Path Away from
Court, but Critics Say the Tolls Are Hefty, ProPublica Illinois (Nov. 13, 2018), available at
https://www.propublica.org/article/diversion-programs-illinois-criminal-justice-systembounceback-correctivesolutions#:~:text=Illinois%20Reporting%20Project,Diversion%20Programs%20Say%20They%20Offer%20a%20Path%20Away%20From%20Cou
rt,ways%20they%20might%20not%20otherwise).
75

15

deceived about the costs involved. For example, Human Rights Watch found that where
probation is offered in exchange for a plea deal, neither the lawyers (prosecutor or defense)
nor the judge would explain the financial burden of private probation, and the companies
may not make their fee schedules available to the public. Indeed, companies have argued that
these figures are trade secrets and have refused to publish them on that basis. Furthermore,
private probation companies frequently fail to inform low-income probationers about their
ability to waive supervision fees (where available), or other legal rights.78
•

Electronic monitoring. Electronic device monitoring (e-monitoring) is becoming increasingly
common for people during the pretrial period or while they are on parole or probation. It is
often administered by private companies, and the vast majority of states allow fees to be
charged for costs associated with it.79 Providers frequently charge a one-time installation fee,
which can be up to $250.80 Afterwards, the person must pay for monitoring; a recent report
found that monitoring fees can be as high as $30 or $40 per day in some counties.81 The
national average for all probation sentences is just under two years, 82 meaning that fees can
add up to substantial sums, particularly for low-income communities that are
disproportionately subjected to it.83
III.

The Oligopolistic Nature of the Corrections Macroeconomy Further Fosters
Junk Fees

The previous sections explain how a single company often controls a particular service within a
correctional facility, creating a monopoly that enables the company to charge unfair and/or
deceptive fees. In addition to these monopolies within facilities, oligopolistic dynamics
characterize the corrections market more broadly. These dynamics further foster junk fees.

78

Id. at 30–31 (citing Sarah Stillman, Get Out of Jail, Inc., The New Yorker (June 23, 2014),
available at https://www.newyorker.com/magazine/2014/06/23/get-out-of-jail-inc.; Interview
with Komala Ramachandra, Senior Researcher, Human Rights Watch (Feb. 15, 2019); and
Human Rights Watch, Profiting from Probation: America’s “Offender-funded” Probation
Industry (2014), available at
https://www.hrw.org/sites/default/files/reports/us0214_ForUpload_0.pdf).
79 Fines & Fees Justice Center, Electronic Monitoring Fees: A 50-State Survey of the Costs
Assessed to People on E-Supervision 1, 4 (2022), available at
https://finesandfeesjusticecenter.org/content/uploads/2022/09/FFJC-Electronic-Monitoring-FeesSurvey-2022.pdf.
80 Id. at 18.
81 Id. at 18–19.
82 Pew Charitable Trusts, States Can Shorten Probation and Protect Public Safety: Wide
Variations in Policies and Term Lengths Across States Point to Opportunities for Reform (2020),
available at https://www.pewtrusts.org/en/research-and-analysis/reports/2020/12/states-canshorten-probation-and-protect-public-safety (“Nationwide, the average probation term is just
under two years, with substantial variation across states. Average terms range from nine months
in Kansas to nearly five years (59 months) in Hawaii.”).
83 Fines & Fees Justice Center, supra note 72, at 1.
16

In particular, two companies dominate the correctional phone market—Securus and ViaPath
(formerly called Global Tel*Link, or GTL)—and these two companies have in turn acquired
numerous competitors that sell products and services like video calling, tablets, electronic
messaging, release cards, and money transfer platforms.84 Securus and ViaPath then offer
correctional facilities packages of unrelated services in one huge “bundled contract.” Bundled
contracts give a company exclusive rights to offer incarcerated people multiple services, all
covered by a single contract. PPI’s research has shown that bundling is now the norm, present in
the overwhelming majority of phone contracts. 85
Bundling allows private companies to obscure the actual cost of providing their various
services—hiding cost information from both end users and the contracting correctional facility.
The oligopolistic nature of the corrections macroeconomy also means that correctional facilities
have little choice in deciding which company to award contracts to. Once again, this lack of
competition prevents companies from having to compete with one another by offering lower
costs.
IV.

Conclusion

Justice-involved consumers are all too frequently forced to pay junk fees imposed by private
companies operating in the market for correctional services. These excessive fees bear all of the
hallmarks of an unfair act or practice under the Commission’s enforcement authority. 86 They
cause substantial harm because they constitute high sums for people least able to afford them.
They cannot reasonably be avoided because consumers are captive to private companies awarded
exclusive contracts. Further, as discussed above, they provide little or no added value to
consumers. And they do not benefit competition: to the contrary, the companies that impose
them can do so only because they enjoy monopoly contracts in an oligopolistic market.
In addition, these fees are frequently deceptive. The practices of omitting fee information,
bundling services, and presenting price information in confusing ways are all likely to mislead
reasonable consumers and result in financial and other harms.87
84

ViaPath Technologies has a 30.4% market share (i.e. provides phone service to facilities
holding approximately 30.4% of all incarcerated people). Securus has a 29.5% market share.
These two companies’ market dominance is the result of their years of buying up competitors.
Wagner & Bertram, supra note 36 at n.20; see also supra note 37 (describing the wide range of
correctional products and services offered by Aventiv, the parent company of Securus, JPay, and
AllPaid).
85
Wagner & Bertram, supra note 36 at n.20. To incentivize a bundled contract, the companies
typically offer a higher commission payment, and dangle the prospect of getting more services
for less negotiation and paperwork. But in exchange, the facilities give up the leverage to
retain only the quality services they want at a price they consider fair.
86 15 U.S.C. § 45(n) (defining an unfair act or practice, for purposes of the Federal Trade
Commission Act, as one that is “likely to cause substantial injury to consumers which is not
reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to
consumers or to competition”).
87 See Fed. Trade Comm’n, “A Brief Overview of the Federal Trade Commission’s Investigative,
Law Enforcement, and Rulemaking Authority” (rev’d May 2021), available at
17

The undersigned thank the Commission for considering the challenges confronting justiceinvolved consumers, and we encourage the Commission to keep this population in mind when
crafting any policy proposals that result from this proceeding. We remain committed to assisting
the Commission in making sure that any such policy proposals address the unjust fees currently
being imposed on consumers who are compelled to use correctional services.
If you have any questions about these comments, please contact Caroline Cohn at
ccohn@nclc.org.
Sincerely,

National Consumer Law Center (on behalf of its low-income clients)
Prison Policy Initiative
Alabama Appleseed
Benton Institute for Broadband & Society
Center for Responsible Lending
Color Of Change
Drug Policy Alliance
Ella Baker Center for Human Rights
Family Assistance Program
FREE! Families Rally for Emancipation and Empowerment
Freedom 4 Youth
Institute for Constitutional Advocacy & Protection, Georgetown University Law Center
Juvenile Law Center
Legal Aid Justice Center
Prisoners’ Legal Services of Massachusetts
Public Justice
Returning Home Foundation
Rights Behind Bars
Riverside All of Us or None
Root & Rebound
Southern Poverty Law Center
Southern Poverty Law Center Action Fund
Texas Fair Defense Project
TimeDone
United Church of Christ Media Justice Ministry
United CORE Alliance
Washington Defender Association
Western Center on Law & Poverty
Worth Rises
https://www.ftc.gov/about-ftc/mission/enforcement-authority (“‘Deceptive’ practices are defined
. . . as involving a material representation, omission or practice that is likely to mislead a
consumer acting reasonably in the circumstances.” (internal citation omitted)).
18