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Reach Out and Bilk Someone
Florida DOC officials were found in 1995 to have fraudulently awarded a contract to North American Intelicom (NAI) to provide "inmate telephone services" to 35 Florida state prisons. Rival communications company MCI filed a protest because they were not awarded the contract, even though their bid scored higher than NAI's in the DOC bid ranking system. [See: "Phone Graft in Florida," PLN Vol. 7 No. 6] An investigation ensued. Senior DOC officials were implicated in a bid rigging scheme, and the contract was then awarded to MCI in November, 1995.
A later investigation by the Florida Public Services Commission (PSC) revealed that during the period in which NAI was providing telephone services, the company routinely over billed people who accepted phone calls from prisoners using NAI phones. NAI subsequently agreed to refund $400,000 to consumers who were bilked by the overcharges. [See: "Florida Utilities Commission Refunds Phone Kickbacks," PLN v.7 #9].
Less than a year after MCI began providing "Inmate telephone services," the company was under investigation for overcharging consumers, imposing a $3 surcharge on collect calls placed by prisoners -- triple what state regulations then allowed.
Kathy Pounds, MCI's director of public policy, Southern Region, says the company did no wrong, asserting that the $3 surcharge "covers the cost of our maximum security features" and pointing out that the rate increase was filed with the Florida Public Service Commission (PSC) which approved them after a 30-day review.
J. Alan Taylor, a PSC regulator, admits the documents filed by MCI were approved. But he said they slipped through quietly and that MCI officials should have known that the higher charge violated PSC rules. PSC Commissioner Julia Johnson characterized the $3 surcharge as a "lawfully filed illegal rate."
The DOC, which under its contract with MCI gets a 53 percent cut of phone revenues, raked in an estimated $10 million from phone calls in 1996. MCI's cut is estimated by the DOC to be in the $8 million to $9 million range. Florida DOC officials acknowledged that the surcharge violated MCI's contract with the department. "We're not going to take any action," said Tom Brooks, a DOC communications engineer. "We have told them we weren't pleased with the situation. But the contract is not real punitive in nature."
On October 29, 1996, by a 5-0 vote, the Florida PSC ordered MCI to refund $1.5 million to customers who were overcharged and to decrease the surcharge to the PSC mandated maximum of $1.75 (raised by the PSC in February, 1996, from $1).
MCI offered to pay the refund by: giving the money to a Daytona Beach Christian organization that serves prisoners' families, putting it into the state Inmate Trust Fund, or simply lowering its rates between Nov. 15, 1996 and Jan. 15, 1997, to make up for the overcharges.
A state DOC official endorsed one of the alternative refund plans. But the PSC voted to require that MCI prove why the company should not be fined up to $25,000 for each day it overcharged customers. The PSC then said that direct refunds were the best alternative.
"It's owed to the customers who paid it," Commissioner Diane Kiesling said. "If it costs the company some time, money and energy [to track down the customers owed refunds], then so be it."
PLN readers in other states should look into the phone contracts in their own prisons. Make test calls, i.e. place a call to a friend or loved one on the outside on a specific day and time. Time the call. Have somebody go to a pay phone outside, as near to the prison as possible, and place the same length collect call, on the same day and time, to the same number. When the phone bill arrives, compare the charges.
Find out which agency in your state regulates phone rates. Contact them and have them provide you with information about what rates are permitted under state regulations. If the phone company serving your prison is overbilling, have your people (the ones who are over billed) write letters of complaint to the state attorney general's office and to the public utilities commission. If you don't watch 'em, who will?
St. Petersburg Times
A later investigation by the Florida Public Services Commission (PSC) revealed that during the period in which NAI was providing telephone services, the company routinely over billed people who accepted phone calls from prisoners using NAI phones. NAI subsequently agreed to refund $400,000 to consumers who were bilked by the overcharges. [See: "Florida Utilities Commission Refunds Phone Kickbacks," PLN v.7 #9].
Less than a year after MCI began providing "Inmate telephone services," the company was under investigation for overcharging consumers, imposing a $3 surcharge on collect calls placed by prisoners -- triple what state regulations then allowed.
Kathy Pounds, MCI's director of public policy, Southern Region, says the company did no wrong, asserting that the $3 surcharge "covers the cost of our maximum security features" and pointing out that the rate increase was filed with the Florida Public Service Commission (PSC) which approved them after a 30-day review.
J. Alan Taylor, a PSC regulator, admits the documents filed by MCI were approved. But he said they slipped through quietly and that MCI officials should have known that the higher charge violated PSC rules. PSC Commissioner Julia Johnson characterized the $3 surcharge as a "lawfully filed illegal rate."
The DOC, which under its contract with MCI gets a 53 percent cut of phone revenues, raked in an estimated $10 million from phone calls in 1996. MCI's cut is estimated by the DOC to be in the $8 million to $9 million range. Florida DOC officials acknowledged that the surcharge violated MCI's contract with the department. "We're not going to take any action," said Tom Brooks, a DOC communications engineer. "We have told them we weren't pleased with the situation. But the contract is not real punitive in nature."
On October 29, 1996, by a 5-0 vote, the Florida PSC ordered MCI to refund $1.5 million to customers who were overcharged and to decrease the surcharge to the PSC mandated maximum of $1.75 (raised by the PSC in February, 1996, from $1).
MCI offered to pay the refund by: giving the money to a Daytona Beach Christian organization that serves prisoners' families, putting it into the state Inmate Trust Fund, or simply lowering its rates between Nov. 15, 1996 and Jan. 15, 1997, to make up for the overcharges.
A state DOC official endorsed one of the alternative refund plans. But the PSC voted to require that MCI prove why the company should not be fined up to $25,000 for each day it overcharged customers. The PSC then said that direct refunds were the best alternative.
"It's owed to the customers who paid it," Commissioner Diane Kiesling said. "If it costs the company some time, money and energy [to track down the customers owed refunds], then so be it."
PLN readers in other states should look into the phone contracts in their own prisons. Make test calls, i.e. place a call to a friend or loved one on the outside on a specific day and time. Time the call. Have somebody go to a pay phone outside, as near to the prison as possible, and place the same length collect call, on the same day and time, to the same number. When the phone bill arrives, compare the charges.
Find out which agency in your state regulates phone rates. Contact them and have them provide you with information about what rates are permitted under state regulations. If the phone company serving your prison is overbilling, have your people (the ones who are over billed) write letters of complaint to the state attorney general's office and to the public utilities commission. If you don't watch 'em, who will?
St. Petersburg Times
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