Today we read the article Class Claims Telecom Gouges Prisoners, from the Courthouse News Service, which reported that Securus, the giant telecom company was sued, a few days ago in a class action, for charging more than 100 times the going rate for phone calls in more than 2,000 prisons.
Lead plaintiff Susan Mojica claims that Securus gained monopoly power to supply telephone services to some 2,200 jails and prisons (which hold more than 850,000 prisoners) in 45 states, by paying kickbacks disguised as commissions.
The commission system is present in almost all states in the US, and allows the state to chose - or actually award/reward – one licensed phone provider for all state prisons and country and local jails. You would think that the company chosen would have the best rates, but the state authorities don’t pick based on rates, but rather on how high the commission that they get is. In other words, who promises them more money gets the contract. When asked about high phone rates and other ridiculous charges the phone companies then regularly blame this commission system, saying that they would gladly charge less, but they have to charge a lot, so that they could pay the state. And the state authorities say they need the money for prisoner education and rehabilitation programs. But those are just excuses – both by the companies and states – as well as blackmail.
Companies like Securus have monopoly over the prison phone call market, so inmates and their families have no choice but to pay for their services – exorbitant prices!
We believe such a system is not only against the law, and a democratic, transparent process, where usually the supplier who has the best rates (in whatever industry) is awarded a contract, but it’s also against all free-market principles. One company then has the monopoly on prison phone calls, and is allowed to do whatever they want.
Mojica claims that payment of kickbacks by inmate telephone service providers is common and substantial, “with reports estimating that kickbacks paid to correctional facilities exceed $103.9 million per year.”
By paying kickbacks – commissions – Securus’ virtual monopoly allowed it “to exploit plaintiff and the class by charging them unreasonably excessive rates for calls, as well as unconscionable and undisclosed fees and connection charges, without regard to what other providers of prepaid calling services are charging in the marketplace,” Mojica says in the complaint.
“As a result of the absence of competition, ‘families of incarcerated individuals often pay significantly more to receive a single 15-minute call from prison than for their basic monthly phone service.”
Securus even charges as high as $0.89 per minute for calls within the United States, plus exorbitant per call connection fees. However, that same company purchases its minutes for calls terminating within the United States from connection carriers for less than a penny per minute.
So, Securus resells the minutes it buys (for less than a penny!!!) for more than 100 times their cost.
The system is set up in such a way that inmates, and their families and friends, have no choice but to set up an account with Securus, and similar companies, and pay these exorbitant rates, if they want to keep in touch with their loved ones. This is not just unfair, but outrageous – and why this system, and this practice, is allowed to continue is atrocious.
Inmates and their families and friends do not have a choice – this is another freedom, the freedom to choose a phone company – that they are not allowed
The Federal Communications Commission (FCC) already imposed restrictions on Securus for violating the Federal Communications Act, determining that the company “exploited its economic position by charging rates for interstate calls greatly exceeding the cost of providing service.”
The class action seeks damages for violations of the Federal Communications Act and unjust enrichment.
Do you think they will win? We sure hope so!
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