Prison Phone Providers Allegedly Inflate Price of Inmate Calls

Three prison phone providers stand accused of colluding to inflate the cost of inmate calls made from U.S. jails and prisons.

Plaintiffs Ashley Albert, Ashley Baxter, Karina Jakeway and Melinda Jabbie have filed a class action lawsuit against Securus Technologies LLC, Global Tel*Link Corp. and 3Cinteractive Corp. after paying what they say are high prices to speak with their imprisoned relatives. 

Not only are the companies charging high prices, the plaintiffs say, but they also allegedly repeatedly lied to their customers and local governments about the costs of the calls in order to charge the inflated prices. 

The plaintiffs say inmate calling service (ICS) providers charge consumers a per-minute rate on many collect calls made by inmates. The recipients of these collect calls typically establish an account with ICS providers using a credit card, which allows the recipients to receive multiple calls from inmates. 

Beginning in January 2010, Securus and GTL, two leading ICS providers, implemented a new “single call” payment method for receiving a one-time collect call from an inmate, the class action lawsuit says.

The ICS providers were able to charge these rates by agreeing to stop competing between themselves and to fix the same inflated prices to consumers, the plaintiffs say. 3CI, a marketing company and payment processor, allegedly helped the ICS providers in their plan.

The defendants also misrepresented and omitted information given to governments and consumers so they could charge the high prices, the complaint says. Securus and GTL allegedly lied by indicating the high prices of single calls were justified because the bulk of the money made from those calls went to 3CI as “transaction fees.”

However, the plaintiffs say the companies were paying 3CI only a fraction of the supposed fees and pocketing the difference, violating the Racketeer Influenced and Corrupt Organizations Act (RICO).

Inmates placing calls from correctional facilities must use inmate calling services, according to the class action lawsuit. The government contracts with an ICS provider for service within a given facility. The inmates have no say in which provider is used.

ICS providers enter into government contracts that identify the rates consumers will be charged for ICS calls, the complaint explains. Those contracts also promise to provide local or state governments with “site commissions” — a percentage of the revenue earned from ICS calls. Site commissions reportedly average approximately 50%.

In a competitive market, ICS providers compete for these contracts by submitting bids, the complaint states. Governments typically award bids based on how reasonable the call rates are and on the site commission percentage.

Securus offered two single-call options: PayNow, which charged the recipient’s credit card $14.99 for a call lasting up to 15 minutes, and Text2Connect, which charged $9.99 to the recipient’s mobile phone account for calls up to 10 minutes, the plaintiffs say.

These programs were included in the government contracts, along with the traditional per-minute rates.

When the single-call programs were included in the government contracts, Securus allegedly paid low site commissions of $1.60 for each PayNow call and $0.30 for each Text2Connect call.

State and local governments received a site commission of only 3% or 11% from each single call sold by Securus, the class action lawsuit claims. By comparison, governments made an average of about 50% on traditional, per-minute ICS calls.

3CI offered collect call recipients the PayNow and Text2Connect options, processed the charges and managed the single-call websites, the plaintiffs claim. When Securus launched its single-call program through 3CI, Securus accounted for about 80% of 3CI’s revenue.

After Securus launched its PayNow program, GTL also began developing a single-call program, then called AdvancePay OneCall (APOC), the ICS providers class action lawsuit says. 

APOC also offered recipients of collect calls from inmates the ability to pay without setting up an account, according to the complaint. APOC charged recipients a transaction fee of up to $3 plus a per-minute rate equal to the per-minute rate recipients with established accounts paid. The program also paid site commissions at the same percentage GTL paid for traditional per-minute calls. 

In November 2012, Securus purchased 3CI’s patent covering technology used to charge mobile phone accounts for single calls, the class action lawsuit says. In 2013, Securus allegedly directed 3CI to approach GTL to request that GTL enter into a contract for 3CI to provide single-call services “identically priced as those provided by 3CI for Securus.”

GTL initially rejected the offer, the plaintiffs claim, but before APOC launched, Securus and 3CI persuaded GTL to agree to provide a single-call program charging the same rates as Securus’ program.

At least one other company has faced a similar lawsuit.

Earlier this year in legal news, Global Tel Link Corp. agreed to pay $25 million to settle claims that it overcharged inmates for phone calling services. Class Members claimed Global Tel Link charged up to 100 times the market rate for calls and didn’t disclose administrative cost charges. Securus, another company in the case, has faced allegationsof taking advantage of immigrant detention.

The plaintiffs in the current case seek to establish a nationwide Class and three subclasses including individuals and entities “that have paid or will pay $9.99 or $14.99 to receive a single collect call operated by 3CI from an inmate in a prison or jail” in the U.S.

They also ask the Court to decree the defendants’ alleged actions to be in violation of the Sherman Act and the RICO statute, and to stop them from continuing the alleged misrepresentations. In addition, the plaintiffs seek a jury trial and to recover damages, pre- and post-judgment interest, court costs, attorneys’ fees and any other relief deemed proper by the Court.

Have you been charged an exorbitant amount for collect calls placed from an inmate at a U.S. jail or prison? Tell us about it in the comments.

The plaintiffs are represented by Matthew K. Handley, Rachel E. Nadas, George F. Farah, Rebecca P. Chang and William A. Anderson of Handley Farah & Anderson PLLC; Benjamin D. Brown, Brent W. Johnson, Robert A. Braun and Christopher J. Bateman of Cohen Milstein Sellers & Toll PLLC; Benjamin D. Elga, Kelly Jo Popkin, Brian J. Shearer and Craig L. Briskin of Justice Catalyst Law Inc.; Daniel Marshall of the Human Rights Defense Center; and Hannah E.M. Lieberman of the Washington Lawyers’ Committee for Civil Rights and Urban Affairs. 

The Inmate Collect Call Rates Class Action Lawsuit is Ashley Alber, et al. v. Global Tel*Link Corp., et al., Case No. 8:20-cv-01936-PWG, in U.S. District Court for the District of Maryland.

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