Most people don't realize that Texas has had a pretty cool law on the books since 1985 that bars merchants from charging customers extra for paying by credit card. The famously annoying credit card surcharge feels like it's everywhere, and Texas is just one of a handful of states where the credit card fee remains illegal. So how exactly is the company that operates the Dallas County Jail's telephones getting away with charging customers $4.95 extra if they pay by credit or debit card?
The phones in the Lew Sterrett Jail are operated by a private jail telecommunications company called Securus that makes its money by offering inmate telephone service on a per-minute or per-call rate, resulting in a high bill that the families of inmates are usually stuck funding.
The phone rates in Dallas aren't spelled out in the county's latest contract with Securus, which the county commissioners approved last month. In documents submitted to the county's purchasing department, Securus says it will try to limit fees, but also says customers will have to pay an incredibly vague thing called the State Cost Recovery Fee: "The only fee Securus may charge is a State Cost Recovery Fee of up to 5% of the cost of a call, for phone calls only," Securus wrote to the purchasing department.
But that's not the only fee for jail calls. Securus also says in its latest deal with Dallas that customers who pay by credit card through phone or on the web, the only possible way to pay for the calls unless you use online banking or mail a check in, will have to pay $4.95 extra for that "convenience:"
Securus always provides no-fee options for account funding when friends and family members choose to fund through online banking or by mail. Securus offers the convenience of immediate account funding through credit/debit card payments by phone or on our Website. Should friends and family members decide to take advantage of this convenience option, there is a funding fee of $4.95.
The state's Office of Consumer Credit Commissioner confirms that a credit card surcharge ban is on the books, located in Texas Finance Code §339.001. However, governmental entities are exempt from the ban, the office says. So where does that leave Securus, a private company that is contracted by a government entity? An OCCC spokesman only said they'll investigate if someone complains. "In reference to your second question about a fee charged by a company that is contracted out by a governmental entity, the answer would depend on the facts," says OCCC spokesman Dana D. Edgerton via email. "We encourage anyone who has a concern about a fee being charged to file a complaint with the OCCC."
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I described the fee to Karen Neely, an attorney for the Independent Bankers Association of Texas. She wasn't convinced it was legal. "I don't think they would be exempt as a government unit," she says.
Securus isn't just set to provide Dallas County's phone service. The county also signed a deal to sign up for Securus video visitation, allowing families to talk remotely to inmates for the cost of $10 for a 20 minute session. That sounds nice in theory, but as I reported in last week's cover, other counties that have installed Securus' video kiosks have since eliminated in-person visits, and Securus has suggested that in-person visits in Dallas may be restricted too.
Securus' CEO Rick Smith declined an interview with me at the beginning of last month when the Dallas County contract was still open."I don't want to contradict anything that Dallas County may do or say," he wrote via email. "So I am going to respectfully decline the interview at this time until Dallas County makes a decision on the contract." He hasn't yet responded to any phone or email messages left for him since then, including an email yesterday asking about the credit card fee.
Send your story tips to the author, Amy Silverstein.