Prison bankers cash in on captive customers

[rafeh1]

Last edited Thu Oct 2, 2014, 06:11 PM - Edit history (1)

Inmates' families gouged by fees

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By Daniel Wagneremail 5:00 am, September 30, 2014

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Pat Taylor holding a picture of her son, Eddie, who is serving 20-year prison sentence at Bland Correctional Center in Virginia. Eleanor Bell/Center for Public Integrity

Editor's note: This is the first in a two-part series examining how financial companies charge high fees to the families of prison inmates. The second part, which will run Thursday, focuses on no-bid deals between Bank of America and JPMorgan Chase & Co. and the U.S. Treasury, under which they provide financial services to the federal Bureau of Prisons. This is a joint investigation with CNBC, whose coverage can be found here.

JOHNSON CITY, Tenn. — Pat Taylor doesn’t believe in going into debt. She keeps her bills in a freezer bag under her bed, next to old photo albums, and believes in paying them on time religiously. For Taylor, living within your means is part of being a good Christian.

Lately, Taylor, 64, has felt torn between that commitment and her desire to be a loving, supportive mother for her son Eddie.

Eddie, 38, is serving 20-year prison sentence at Bland Correctional Center for armed robbery. He’s doing his time at a medium-security Virginia state prison located 137 miles northwest of Johnson City, across the dips and valleys of the Blue Ridge Mountains here in the heart of Appalachia. The cost of supporting and visiting Eddie keeps going up, so Pat makes trade-offs.

“I would send him money even if it broke me, because I do go without paying some bills sometimes to go see him,” Pat says.

Between gas to make the trip and overpriced sandwiches from the prison vending machine, visiting Bland costs about $50, a strain on her housekeeper’s wages. So she alternates, visiting Eddie one week and sending him money the next.

To get cash to her son, Pat used to purchase a money order at the post office for $1.25 and mail it to the prison, for a total cost of less than $2. But in March of last year, the Virginia Department of Corrections informed her that JPay Inc., a private company in Florida, would begin handling all deposits into inmates’ accounts.

Sending a money order through JPay takes too long, so Taylor started using her debit card to get him funds instead. To send Eddie $50, Taylor must pay $6.95 to JPay. Depending on how much she can afford to send, the fee can be as high as 35 percent. In other states, JPay’s fees approach 45 percent.

After the fee, the state takes out another 15 percent of her money for court fees and a mandatory savings account, which Eddie will receive upon his release in 2021, minus the interest, which goes to the Department of Corrections.

Eddie needs money to pay for basic needs like toothpaste, visits to the doctor and winter clothes. In some states families of inmates pay for toilet paper, electricity, even room and board, as governments increasingly shift the costs of imprisonment from taxpayers to the families of inmates.

“To give him $50, I have to send $70 off my card,” says Taylor, who moved to a smaller apartment on the outskirts of Johnson City in part because of the rising cost of supporting Eddie.

“They’re punishing the families, not the inmates.”

Price of prison

JPay and other prison bankers collect tens of millions of dollars every year from inmates’ families in fees for basic financial services. To make payments, some forego medical care, skip utility bills and limit contact with their imprisoned relatives, the Center for Public Integrity found in a six-month investigation.

Inmates earn as little as 12 cents per hour in many places, wages that have not increased for decades. The prices they pay for goods to meet their basic needs continue to increase.

By erecting a virtual tollbooth at the prison gate, JPay has become a critical financial conduit for an opaque constellation of vendors that profit from millions of poor families with incarcerated loved ones...


[link:
http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers|http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers]

[littlewolf]

1. I worked for NC DOC for 10 years. I left 9 years ago.

I do not know how it is now, have not kept in contact with anyone.
but the inmates had to buy their own toothpaste, stamps. etc
medical was free, if you declared an emergency (life or death)
and it wasn't, you were charged 10 dollars.
soap was provided, paper, envelopes, winter clothes, all provided.
canteen was available for snacks/sandwiches/drinks
and it was cheaper then the stores. (pepsi was like 25 cents no name soda was 15.)
if you were indigent you got batteries for your radio free and 10 stamps per month.
your radio was very important as we had silent tv.
the audio portion of the broadcast was xmitted over FM radio. for the prison.
I have never heard of anyone buying winter clothes in prison.

however this much is true .. the system really shafts the families every way
they can.

[davidpdx]

2. I have a family member who is incarcerated and I try to send money when I can

I believe Oregon has a system where you can go online to deposit money, but they still allow the traditional way of mailing a money order to the person's trust account.

Living overseas makes it worse because getting a cashier's check here is expensive (plus the exchange fees). I happened to be over in the US and got a money order ahead of time to mail and it only cost me about a dollar.

[Live and Learn]

3. I would much appreciate the link for that article.

Private companies making money off of imprisonment is disgusting.

So few people realize how bad it is. Charging inmates (whose only source of money is family members) for basic toiletries is abhorrent. And charging families for the 'privilege' of talking to their loved ones is equally abhorrent.

[Live and Learn]

4. Please re-post with the link

and I think you may have violated DU rules by posting too many paragraphs.

[rafeh1]

6. deleted some paras and clarified link

[Live and Learn]

5. Found the link. Good article.

http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers

[Art_from_Ark]

7. Just another one of the policies designed

to keep poor people poor