How to spot the hidden costs in a “no-cost” tablet contract

by Wanda Bertram and Peter Wagner, July 24, 2018

If someone offered you a free computer, you’d rightly be suspicious that there were strings attached. So when private companies offer “free” tablets to incarcerated people, politicians are understandably skeptical, looking for hidden costs to the state.

But in their quest for an answer, politicians will often fail, as we saw in New York State earlier this year. Private company JPay signed a contract with the New York Department of Corrections to give free tablets to 52,000 incarcerated people. Facing questions from legislators, the department insisted – truthfully – that taxpayers wouldn’t pay a dime.

Legislators dropped the issue without asking the bigger question: What would motivate a company to give away 52,000 tablet computers for free?

We filed a public records request, and got a more complete answer: The 52,000 “free” tablets are part of a package deal (or “bundled contract”) of several JPay services that gouge incarcerated people and their families.

Graphic explaining how much money 'free' tablets actually cost incarcerated people.

The contract contains virtually every exploitative trick we’ve documented in the past several years, including:

  • Taking over the state prisons’ banking system, so they can add fees for services like depositing money. Transferring just $10 to a loved one’s account in a New York state prison will soon cost between $3.15 and $4.15.
  • Selling $0.35 “stamps” for a product they have the nerve to call email. (We all have a love/hate relationship with our inboxes, but calling prison messaging email is not fair to email.)
  • Providing refunds to incarcerated people when they are released, not in a check, but via a pre-paid debit card rife with fees – such as monthly “service” fees, fees for checking your account balance, or automatic fines for inactivity. (You can request a paper check instead – for $10.)
  • Offering video chats at $9 for every 30 minutes.
  • Charging above-market prices for media, such as music and e-books.

These provisions explain how JPay expects to make almost $9 million in five years from a contract that is free to the state: by selling profitable, fee-laden services against “complementary” products like tablets.

New York state legislators never bothered to solve this mystery, but it’s ironic how close some of them got. Take Republican Assemblyman Steve Hawley, who demanded: “If it’s this easy to encourage vendors to provide free tablets to inmates, why aren’t they being provided to our students?” The answer, as columnist Erica Bryant points out, is that students would never purchase a fake “stamp” to send an email to their parents.

Companies like JPay are offering “free” tablet programs to a growing number of states, and legislators should approach these offers with caution. You don’t need an advanced degree to find the hidden costs in New York’s “no-cost” contract. The trick is looking not only at taxpayer costs, but also at the exploitation of incarcerated people and their families.