Reach Out and Gouge Someone

How inmate phone services lock up profits.

Make no mistake about it, the inmates in the Colorado Department of Corrections are paying dearly for their crimes. So are their families. Just look at their phone bills.

One of the privileges prisoners lose when they go to the slammer is their choice of long-distance carriers; their calls to loved ones and attorneys, often collect, carry toll charges that are among the highest allowed by law. But in recent years the DOC and private phone companies have found ways to squeeze even more profit from the state's largest captive market, devising add-on charges and hidden costs that, if extracted from any other group of phone users, would have consumer groups screaming bloody murder.

On Monday, February 9, the Colorado Supreme Court will hear oral arguments in a long-simmering lawsuit brought by inmates and their families complaining of the excess charges. The case, which involves an inmate phone system operated by Sprint under contract with the DOC from 1991 until 1995, provides a glimpse of the kind of money that can be made off prisoners' phone calls--and raises questions about the state's reluctance to regulate the operation the way other phone systems are regulated.

Prisoners'-rights activists say the fundamental issue is whether inmate phone charges are fair and reasonable. "No one's saying that they don't want to pay for phone service," says Jean Auldridge, director of the Virginia chapter of Citizens United for the Rehabilitation of Errants (CURE), who's been following similar cases around the country. "They just don't want to be gouged."

Prisoners using the Sprint system could call a list of pre-approved numbers collect or charge their calls to a debit card that withdrew money from their inmate account; in either case, they were assessed a $1.25 surcharge per call in addition to toll charges. Although no call could last more than fifteen minutes, callers were allowed to redial as long "as money allows"--and would get socked with another surcharge each time. Inmates also complained of being charged for calls even if no one answered the phone--after a few rings, the system simply billed the transaction as a completed call--and of being billed for "ring time" on calls when they did reach their party.

According to court documents, one of the selling points Sprint used to pitch the system to the DOC, which received nearly one-fifth of the revenues from the service, was that profitability would be increased by assessing the "maximum inmate charge of operator assisted rates," even though the system was automated and inmates received none of the benefits of an operator-assisted call--such as having the option of making the call person-to-person in order to avoid being charged for making a connection to an answering machine.

Ron Beeks, the attorney for the complainants in the case, says the additional charges have resulted in some hefty phone bills. "It's not the prisoners who are paying for this," he notes. "It's their families, and they haven't been convicted of anything. Who would put up with charges like this if they had a choice?"

DOC officials have argued that the Sprint system was necessary because the previous phone system was subject to fraud, but in its court filings, the state has yet to address the alleged charges for unanswered calls and ring time. Nor is it clear who decided to impose a $1.25 surcharge to defray the costs of the system: The state's attorneys contend that it's a Sprint surcharge, while Sprint's attorneys say the per-call fee "is levied and collected from the inmates by the DOC, not Sprint," prompting Beeks to describe his opponents' responses as a "shell game" and "the quintessence of bureaucratic buffoonery."

Beeks is asking the Supreme Court to direct the Colorado Public Utilities Commission to rule on the legality of the charges. The PUC has taken the position that the $1.25 surcharge amounts to an unregulatable "equipment charge" and that it has jurisdiction only over the system's intrastate toll charges. (Interstate phone service is regulated by the FCC, but the majority of inmate calls are to parties within Colorado.)

If the court rules in his favor, Beeks says, "at that point, we'd be demanding refunds. At the very least, we'd be talking about hundreds of thousands of dollars."

Just how much money is involved--and where it goes--is also under dispute. The DOC claims to have netted $468,716 in four years under the Sprint contract, a figure that seems too low to Beeks, since other records indicate monthly gross revenues from inmate phone service of $340,000. Under the current phone contract with MCI, which gives the DOC a third of the total phone revenues, the department collected $1.76 million in 1997 alone.

DOC spokeswoman Liz McDonough says the phone profits "have to be used for programs that benefit inmates." But according to court documents, revenues from the Sprint contract flowed through the inmates' canteen fund to the state legislature's general fund and were reappropriated for other DOC uses such as administrative services.

Whether the inmates prevail in the Sprint lawsuit or not, many of the same complaints have been raised about the current phone system. The surcharge persists, and prisoners say the system is so overwhelmed by the growth of the inmate population that calls are sometimes cut off accidentally before the fifteen-minute limit, prompting callbacks and more surcharges. In addition, inmates who've been shifted to private prisons don't have the option of a debit card and face generally higher collect-call rates than those in DOC prisons.

Trying to avoid charges for ring time or unanswered calls, some prisoners have taken to dialing their loved ones just long enough to let the phone ring two or three times to let them know they're safe--but the DOC regards such behavior as improper "signaling." "Guys are going to the hole for this," says Sandi Izor, executive director of the Human Rights Coalition, who keeps a time sheet of all her calls from her inmate husband, Garry, and has obtained refunds for some charges. "It's ridiculous."

CURE's Auldridge says that other states take an even bigger bite of inmate phone revenues--last year Virginia collected $12.5 million, half the total revenues from that state's prison phone system--and that state officials have been reluctant to address the propriety of developing a multi-million-dollar revenue stream at the expense of struggling families of men who've been incarcerated.

"They think they've found a group of people who have no voice, who they can do anything they want to," Auldridge says. "They can't see the moral issue. The legislators don't want to give up the money."

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