50 Pages Posted: 5 Feb 2017
Date Written: April 16, 2016
In recent years, state corrections departments have faced pressure to provide better prison conditions, while simultaneously cutting costs. Many critics have touted the emergence of privatized prison services as a cost-effective resolution. However, those services shift the costs on to some of the poorest and most vulnerable consumers, prisoners and their families. This Note explores how private companies providing prison banking services to state correctional facilities use unfair practices to increase profits. The umbrella of prison banking services includes deposits into inmate trust accounts, which allow prisoners to purchase necessities, as well as prepaid debit release cards, which are used to return money to prisoners upon release. This Note describes how certain private companies retain a monopoly on these services, and are awarded contracts based on the amount of commission paid to state correctional facilities.
As a result of paying those commissions and having no incentive to cut costs, private companies drive up their prices and charge consumers exorbitant rates to make deposits or to utilize prepaid cards. These practices are disproportionately affecting prisoners’ families who provide their incarcerated loved ones with monetary support, as well as released inmates struggling to get back on their feet post-incarceration. Statistically speaking, both of these groups are more likely to be low-income and least able to manage additional financial strain. This Note proposes state-level legislation to better protect consumers from these abuses and outlines five key provisions that, if adopted, will serve to prevent private companies from increasing their profit margins at the expense of vulnerable consumers.
Keywords: prison banking, prison profiteers, consumer protection, prison conditions, prisons, profiteering, privatized prisons
Suggested Citation: Suggested Citation
Akenhead, Catherine Elizabeth, How States Can Take a Stand Against Prison Profiteers (April 16, 2016). George Washington Law Review, Vol. 85, July 2017, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2911059