State Prison Systems Privatizing Prisoner Accounts for Commissions

by David M. Reutter

Three state prison systems have relinquished control of their prisoner trust accounts to a private company. The contracts provide for fees on deposits and “commissions” on each transaction for the prison systems.

JPay, a private company based in Miami, provides money transfers, video visits, music and games on electronic devices, and processes court ordered payments. According to is website, it operates in prisons and jails in over 30 states. New contracts add new services or expand JPay’s reach into prisons in Florida, North Carolina, and Tennessee.

Florida has had a contract with JPay since 2005, which was limited to its receipt of prisoner fund deposits electronically. It shared space in this arena with Western Union. The contract that took effect on July 1, 2013, eliminated competition from Western Union and gave JPay full control over prison fund receipts.

Like the contracts in North Carolina and Tennessee, the Florida contract allows JPAY to receive all funds for prisoner accounts, funds can be transmitted, for a fee, in person (walk-up), over the phone, or on the internet. The fees vary by the amount transmitted and the method used.

In Florida, a walk-up transaction of up to $5,000.00 costs $6.95. Phone transactions range from $5.95 for up to $20.00 to $12.95 for $300.00. Internet transactions run from $4.95 for up to $20.00 to $11.95 for $300.00. No matter the type or size of the transaction, the Florida Department of Corrections (FDOC) receives a $2.50 commission.

Those wanting to send funds to North Carolina prisoners pay $3.45 for up to $20.00 and $10.65 for $300.00 for an online transaction; $4.45 for up to $20.00 and $11.65 for $300.00 for a phone transaction. The North Carolina Department of Public Safety receives $0.25 for each of those transactions.

Anyone wanting to provide funds to a Tennessee prisoner will pay $8.95 if done so at a walk-in location. Online transfers of $20.00 or less cost $3.90 and a $300.00 transfer runs $10.90. By phone it’s $4.90 for up to $20.00 and $11.90 for $300.00. On each transaction, the Tennessee Department of Corrections (TDOC) receives a $0.50 commission.

Deposits made by mail in any of these three states have no charge attached. Some prisoners, however, complain JPay delays transferring funds to their account for 5-10 days to push them to pay fees for automatic transfers. Others see another motive.

“I think JPay delays putting monies into our accounts so it can increase its ability to earn interest,” says Florida prisoner Norris Hawkins. As the Florida’s contract allows JPay to delay transfer of collected funds to FDOC’s account to “within seven days of receipt,” JPay has a fiscal interest in holding those funds for the maximum time allowed.

Florida’s contract allows JPay to receive court ordered payment transactions. It will charge $3.95 for any walk-up payment. Phone transactions start at $0.295 for up to $20.00, $5.95 for $20.00 to $100.00, $7.95 for $100.01 to $200.00, and a cost increase of $2.00 on every additional hundred dollar payment, to a maximum of $24.95 for $1000.00. Internet transactions are similar, but all fees are a dollar cheaper than the identical phone transaction. FDOC’s commissions ranger from five percent on the smallest transaction to 0.13 percent on the largest.

Some say this is a service of convenience. Others complain it is an unfair fee on those least able to afford it. Whatever side you take, it must be recognized that such contracts are an expansion of earning potential for prison profiteers and for funding of the prison industrial complex itself.

Sources: FDOC contract #C2763; TDOC Tracking #32901-31188; Charlotte Observer