Ever heard of VoIP and how prisons use it to make money?
It stands for Voice over Internet Protocol. Basically, it makes calls cheaper because they are placed through the Internet. It’s usually use with specialized equipment or software so that it makes the connection.
Now, you may never actually use it, but you do in one way or another. Like when you call a customer service line? Chances are they use VoIPs because they are easier to maintain as they do not need a physical connection to a hardwired phone system. Also, there maybe times you placed calls over WiFi with your mobile service. Those times, you’re using VoIP.
Companies are not going to market that term... unless you’re using Vonage.
I can’t pull up prices, but let me tell you how potentially low a call can possibly be:
In order to make a whole penny, you have to be on the call for about 20 minutes because could be as low as 0.0005/minute. So, a two hour phone call from New York to Seattle can cost a mere 6 cents... potentially. (Remember, I can’t pull up the standard rates at the moment)
So, how is it that VoIP can help make prisons money? Well, I recently discovered that in order for me to talk to an inmate, I need to pay for a “collect phone call”. But I can’t charge it to my phone service... oh no. That would be too easy.
See, I have to pay using a card.
Now, here’s where the math comes in...
Along with a connection fee and a limit of 15 minutes on the phone, it comes up to $8.65. I get charged a rate of 0.21 cents per minute.
So, $3.15 is used for the actual call, which means the rest of the money is for processing fees, because Visa/MasterCard wants their cut, then it cost money to maintain that phone system, along with taxes and what’s not. So, $5.50 is the amount I paid JUST to connect before the money used for the minutes kick in.
That’s messed up. But let’s get back to the actual call, which is $3.15.
If we applied the “standard rate” we put in earlier, the 0.0005/minute for 15 minutes, it comes up to 0.0075 total for the call. Meaning when you consider it, they made a profit of $3.1425...
... from just ME!
Now, you may/may not know this, but they charge the inmate for the call as well... on a per minute charge. Assuming that they get a lower rate on their end... let’s say .05 a minute and let’s take out the connection fee (I don’t know if they do get charged one or don’t, but at this time, it doesn’t matter). At 5 cents a minute with a 15 minute max... that would be 75 cents.
So, my one call to the inmate cost me $3.15 + their .75 just for the minutes. So, they made $3.90 off a call that costs them less than one penny to make.
Also, keep in mind that if the person doesn’t do “prepaid” (another rip off), and they keep the phone call short, they don’t get the money back and can’t use it for future calls.
So, here’s the deal...
If the prison phone system made $3.90 off one call...
times that by 50,000 calls across the United States on a daily basis... that’s $195,000 daily.
And how much money did VoIP saved them?
Let’s see... if my math is correct... they made $194,625 in profit because they lost... $375.
And that my friends is the power of VoIP and how you can use technology to make a TON of money off prison.
Oh, what a wonderful time to be alive...
P.S. - the numbers I wrote about in this post are theoretical and may not be the actual practice. However, the systems in place are real, VoIPS do lower costs of connectivity and since the prisons’ communications are for profit, it wouldn’t be that far of a reach.
Update: When I posted this up, I said “they made $194975 in profit because they lost... $25.”
This is incorrect because my math was slightly off.
My original math was the calls up by 50,000 * 0.0005 for the $25, which doesn’t make sense.
What I should have done was the following: get the total of the profits by the minutes of the 50,000 calls. So, it would be 750,000 minutes. So, adjusting... if the lose 0.0005 per minute for 750,000 calls on a daily basis... then it would come up to $375, not $25. So, my bad. I should have double checked my math.
But still, the profits is still high for communications via prisons.
