UDAP Challenges to Prison Financial Exploitation

Today private companies play a major role in nearly every segment of our punishment system. Goods and services that were once provided for free to those incarcerated now come with a price tag. This includes phone, video, and e-messaging services; items sold through the prison “commissary,” such as clothing, hygiene products, medicine, and food; music and educational programming on tablets; and transferring money into prison and receiving it upon release. Family members typically can no longer send or bring in items for their incarcerated loved ones.

The private companies often have a monopoly over a particular good or service within the carceral facility. The predictable result is abusive transactions—in some cases, extraordinarily abusive. 

This article describes some of the current abuses and a powerful tool to remedy these abuses—state UDAP statutes. These statutes are found in every state and generally prohibit unfair or deceptive practices, and in some cases unconscionable or abusive practices. UDAP statutes offer powerful remedies for abuses directed at incarcerated people and their loved ones. 

This article considers how UDAP claims have been and can be applied to the carceral marketplace and discusses certain obstacles to their use. For more detail on state UDAP statutes, see NCLC’s Unfair and Deceptive Acts and Practices. Appendix A is a state-by-state summary of key features with citations to each state’s UDAP statute(s).

Advantages of UDAP Challenges to Corporate Exploitation in Carceral Facilities

UDAP standards are broad and flexible, can be applied to new forms of abuse, and can apply to almost any type of financial abuse directed at those incarcerated. In comparison the Eighth Amendment (“Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted”) requires litigants to show that the conditions “deprive inmates of the minimal civilized measure of life’s necessities.” Rhodes v. Chapman, 452 U.S. 337, 347 (1981).

UDAP claims have a significant history of judicial interpretation and incorporate standards of unfairness established by both the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). Many state UDAP laws, either through an express statutory provision or judicial construction, give substantial weight to FTC and federal court interpretations of the FTC’s unfairness and deception standards. Because state standards derive from this common source, practitioners can use court rulings in other jurisdictions that find practices related to incarcerated consumers to be unfair.

State UDAP statutes have strong private remedies—actual damages, typically attorney fees and equitable relief, and often either minimum, multiple, or punitive damages. Equitable relief can include enjoining harmful practices. UDAP claims can facilitate class action certification where standardized practices can be found to meet the definition of unfair or unconscionable. See generally NCLC’s Unfair and Deceptive Acts and Practices Chapter 12. 

UDAP Challenges to Overpriced Goods and Services Sold to Incarcerated People

Corporations often compete for contracts allowing them to be the exclusive vendor for goods or services at a carceral facility, such as: products sold through commissaries (e.g., food, clothing, soap, over-the-counter medications, fans, and religious items); digital content on tablets; and communication services.

A nationwide investigation by the Appeal found that goods sold in prison commissaries are subject to considerable mark-up, as much as 600%, including: 

• Medical aids like hearing aid batteries, denture adhesives, and reading glasses (e.g., reading glasses are over $15 in Vermont prisons, about five times the price at Walgreens); 
• Religious items (e.g., Kufi caps for incarcerated Muslims are more than $12 in Indiana prisons, though they can be purchased on the outside for under $3); and 
• Fans and drinking water (e.g., in Kansas prisons, which lack air conditioning, an 8-inch “West Bend” brand fan costs $52.96; Ohio prisons sell the same fan for under half that price).

Elizabeth Weill-Greenberg, Ethan Corey, The Appeal, Locked In, Priced Out: How Prison Commissary Price-Gouging Preys on the Incarcerated (Apr. 17, 2024).

Incarcerated people typically earn pennies an hour or are paid nothing at all for their work, and they rely on their loved ones to help pay for these items, although families of incarcerated people are often under their own financial stress. FWD.us Education Fund, We Can’t Afford It: Mass Incarceration and the Family Tax (June 2025).

Such price gouging may be an unfair or unconscionable practice in violation of a state UDAP statute. See Antoon v. Securus Technologies, Inc., 2017 WL 2124466 (W.D. Ark. May 15, 2017) (denying motion to dismiss UDAP claim where plaintiffs alleged telecommunications services offered to incarcerated people “exploited those monopolies by charging ... oppressive rates”).

In a recent paper, Brian Shearer describes the practice of overcharging captive consumers across a variety of market scenarios, explaining why such conduct is unfair, violating most states’ UDAP statutes. See Brian Shearer, Vanderbilt Policy Accelerator, Price Gouging Captive Customers § III (Nov. 2025). The paper discusses overcharging incarcerated consumers as one example of this “price gouging.”

In cases where companies pay a kickback to the carceral facility in exchange for gaining an exclusive contract with the facility—commonly referred to by industry actors as a “site commission”—the portion of the price paid by the incarcerated person or their loved one that went to paying the kickback could constitute a substantial injury, meeting one of the elements of the FTC unfairness definition. See id. at 19 (citing Stalker v. MBS Direct, L.L.C., 2011 WL 797981 (E.D. Mich. Mar. 1, 2011) (refusing to dismiss UDAP price unconscionability claim against textbook seller that inflated its prices to recoup kickbacks it paid to schools that gave it exclusive contracts)). See also Marleen Marra, Nathan Miller & Gretchen Sileo, Georgetown McDonough School of Business Research Paper No. 4873999: The Commission Paradox: Evidence from Prison Telecommunications (Sept. 10, 2026) (econometrics analysis finding that site commissions raise rates for end users when certain conditions are met; these conditions are satisfied when correctional facilities contract with private companies to sell goods and services to incarcerated people and their loved ones).

The second element of the current FTC unfairness definition is also easily met in that price gouging cannot be reasonably avoided if there is only one vendor. See “Individual Variations in UDAP Statutes,” infra. For the third element, companies may try to argue that any injury caused by their monopoly prices is outweighed by “countervailing benefits to consumers” because the correctional facility uses their kickback payments for “Inmate Welfare Funds.” See “Individual Variations in UDAP Statutes,” infra. These welfare funds are supposed to be used for non-essential purchases that collectively benefit the incarcerated population. Recent reporting indicates that such arguments may well be belied by the evidence.  Brian Nam-Sonenstein, Prison Policy Initiative, Shadow Budgets: How Mass Incarceration Steals from the Poor to Give to the Prison (May 6, 2024).

A substantial body of case law also holds that a seller commits a UDAP violation by charging unconscionably high prices. See NCLC’s Unfair and Deceptive Acts and Practices § 4.5. Where legislation or regulations set price caps for certain goods or services sold to incarcerated people or their loved ones, a UDAP claim may apply if the company charges prices higher than those caps.

Companies may try to evade such caps by charging ancillary fees or by using rate structures that combine rates for different services under a single rate. See, e.g., Karina Wilkinson, Amended Corrections Communication Rates in Massachusetts (Sept. 30, 2024) (explaining that the telecommunications company Securus “introduced a new rate structure whereby video and electronic messaging rates are rolled into the ‘phone’ rate,” and in some jails “tablets and digitized mail scanning are also part of the ‘phone’ rate”). These practices make it more difficult to determine what price companies are charging for the regulated good or service and therefore whether they are complying with caps.

Most UDAP precedent regarding price gouging is in the context of emergency conditions after a natural disaster or during the COVID pandemic. For example, the Washington Supreme Court found that price gouging during the COVID pandemic was an unfair practice under the state UDAP statute. See Greenberg v. Amazon.com, Inc., 553 P.3d 626 (Wash. 2024). See also Day v. GEICO Cas. Co., 580 F. Supp. 3d 830 (N.D. Cal. 2022) (refusing to dismiss claim that motor vehicle liability insurer committed unfair practice by unjustly retaining a windfall in the form of premiums that became unnecessary when global pandemic drastically reduced driving and accidents). These cases can be analogized to the carceral context as recognizing unfairness in situations when the market is not functioning.

Discouraging Free Services in Order to Direct Incarcerated People to Paid Services

A company with a contract to provide free services to incarcerated people can use its control over those services to drive incarcerated persons and their loved ones to utilize that company’s paid services. For example, Aramark, a Fortune 500 company, contracts with carceral facilities nationwide to provide food services. In a UDAP class action against Aramark, plaintiffs allege that Aramark failed to provide incarcerated people with adequate free daily meals at a West Virginia prison to drive them to purchase food from Aramark’s for-purchase programs at that prison. 

The federal district court case rejected multiple arguments for dismissal, including failure to state UDAP, economic duress, and unjust enrichment claims. See Smith v. Aramark Corporation, 2:25-cv-710 (S.D. W. Va. Aug. 19, 2026). The case is proceeding through discovery. 

Similarly, UDAP claims have recently been brought against the company iWebVisit, a jail telecommunications provider, alleging that it conspired with sheriffs to ban in-person visits with incarcerated people to drive people to use iWebVisit’s for-purchase communication services. See Complaint, Etter v. Solano County, No. CU26-06976 (Cal. Super. Ct. Sept. 17, 2026). 

Abuses Involving Company’s Provision of Stored Value Cards 

JPay and other companies contract with carceral facilities to provide financial products and services to incarcerated and formerly incarcerated people. UDAP litigation involved JPay providing prepaid cards to hold money owed to incarcerated people upon their release, including the person’s gate money (to which they were entitled pursuant to state or local law, regulation, or policy) and their own funds from their prison accounts. 

The CFPB found that JPay engaged in unfair and abusive practices by requiring incarcerated people to use fee-laden JPay cards to obtain their owed funds and charging fees on the cards not authorized by the cardholder agreements. The CFPB also found that JPay violated the Electronic Fund Transfer Act (EFTA). A CFPB consent order required JPay to pay $4 million for consumer redress, among other remedies. See Consent Order, In the Matter of JPay, L.L.C., 2021-CFPB-0006 (C.F.P.B. Oct. 19, 2021).

A Washington federal court class action brought by recently released incarcerated people alleged UDAP, EFTA, and other violations involving a company’s prepaid cards provided when they were released. The complaint alleged that class members lost a substantial portion (sometimes all) of their funds due to hefty card fees. A 2021 ruling in the case found an arbitration requirement not enforceable. See Reichert v. Keefe Commissary Network L.L.C., 542 F. Supp. 3d 1133 (W.D. Wash. 2021). After favorable rulings on class certification, in 2022 the court approved a $287,000 award to be paid by one defendant to a subclass that brought a claim under Washington’s UDAP statute, among other claims. The following year, the court approved an $11.6 million class settlement for claims under the EFTA.

Any UDAP challenge to stored value cards provided to present or recently released incarcerated people should consider EFTA requirements in addition to UDAP claims. See NCLC’s Consumer Banking and Payments Law Chapter 7.

Excessively Priced Telecommunication Services

An Arkansas UDAP claim was brought against Securus, a major nationwide provider of telecommunications services to incarcerated people, alleging Securus obtained exclusive contracts to provide telecommunications services at carceral facilities and then “exploited those monopolies by charging ... oppressive rates.” The federal district court denied Securus’s motion to dismiss and held that “improperly exploiting economic leverage resulting from exclusive-provider contracts” formed the basis for an actionable claim of unconscionability under Arkansas’s UDAP statute. Antoon v. Securus Technologies, Inc., 2017 WL 2124466 (W.D. Ark. May 15, 2017). The district court ultimately entered a consent judgment in the plaintiff’s favor.

A New Jersey UDAP unconscionability claim was brought against Global Tel*Link (GTL), another major nationwide provider of telecommunications services to incarcerated people. Plaintiffs alleged GTL paid large kickbacks to New Jersey carceral facilities in exchange for exclusive contracts to provide communication services, which resulted in GTL charging the plaintiffs excessive rates and fees that they accepted “out of desperation” to speak with their loved ones. Following several favorable rulings that specifically addressed the UDAP claim, including the district court’s denial of GTL’s motion to dismiss (James v. Glob. Tel*Link Corp., 2020 WL 998858 (D.N.J. Mar. 2, 2020)), grant of class certification (James v. Glob. Tel*Link Corp., 2018 WL 3727371 (D.N.J. Aug. 6, 2018)), and denial of GTL’s motion for summary judgment (James v. Glob. Tel*Link Corp., 2018 WL 3736478 (D.N.J. Aug. 6, 2018)), the federal district court approved a class settlement that included $25 million for class members and over $8 million in attorney fees and expenses. 

Relevant to any new UDAP challenge of telecommunication prices for incarcerated people are the Federal Communications Commission’s regulations setting interim rate caps for audio and video telecommunications and addressing site commission payments and fees. The regulations are the subject of ongoing rulemaking and litigation.

Bail Bond Abuses

Bail bond abuses are subject to UDAP challenge. For example, a co-signer on a bail bond brought California UDAP claims for failing to provide a statutorily required notice of the risks of co-signing a consumer credit contract. The state appellate court affirmed the trial court’s determination that the plaintiff was likely to succeed on the merits of her California UDAP claim—the UDAP statute in question prohibits both unlawful and unfair practices. The trial and appellate court based their rulings on the practice being unlawful. See BBBB Bonding Corp. v. Caldwell, 288 Cal. Rptr. 3d 439 (Cal. Ct. App. 2021). In February 2026, the trial court granted final approval of a class-action settlement that permanently barred the company from collecting $38 million from Californians who had cosigned bail agreements. 

Unfair Terms & Conditions; Warranty Breaches

The contract terms and warranties offered to incarcerated people are often extremely one-sided. For example, Union Supply, a major provider of commissary services in carceral facilities, provides the following terms and conditions on its website: “Union Supply does not warrant that product descriptions or other content of our catalog, order forms, or website is accurate, complete, reliable, current, or error-free,” and further notes that “such errors, inaccuracies or omissions may relate to product description, pricing and availability” (emphasis added). 

The site directs unsatisfied consumers to the “Rules & Regulations section” for more details, but that section does not appear to be on the website. The “Rules & Regulations” webpage available on the Union Supply California website provides that order “discrepancies reported by the 3^rd party purchaser of the package will not be accepted or honored” for refunds or replacements. 

One-sided warranty and remedy terms, such as unusually short warranty periods, may be unfair and unconscionable, particularly where the warranty offered violates state law or the same product is offered outside the carceral facility with a far more favorable warranty or terms.

Even when a reasonable warranty attaches to a product sold to those incarcerated, the company may ignore warranty rights. Such systematic violation of warranty rights is a state UDAP violation. See NCLC’s Unfair and Deceptive Acts and Practices § 5.6.7.1.

Potential Obstacles to a UDAP Claim

  —Prison Litigation Reform Act (PLRA) and State Equivalents 

The federal Prison Litigation Reform Act (PLRA) requires, among other things, that incarcerated plaintiffs exhaust administrative remedies before bringing a federal claim to challenge a condition of their confinement, which the statute and interpreting case law defines very broadly. See Practical Law Litigation, Practical Law Litigation’s Prison Litigation Reform Act (PLRA): Procedural Basics (available on Westlaw).

The federal PLRA’s exhaustion requirement does not apply to state UDAP claims but would apply to RICO or other federal claims. Even for federal claims, the PLRA does not apply where the plaintiffs are not incarcerated themselves—for example, family members who send money transfers or purchase phone calls. The PLRA also does not apply to people who are civilly detained, including those held in immigration detention. 

Several states have enacted laws analogous to the federal PLRA (called “state PLRAs”). Such statutes may limit state UDAP claims involving incarcerated people. 

  —Sovereign Immunity

The doctrine of sovereign immunity protects publicly run prisons from being sued, with several exceptions. Private prisons and private companies working with public carceral facilities may try to claim derivative sovereign immunity, also known as state contractor immunity or the government contractor defense. This doctrine provides a defense for private contractors from civil liability—but not a shield from being sued—when they are carrying out work that is directed, designed, and authorized by a government entity. See GEO Grp., Inc. v. Menocal, 607 U.S. 438, 441 (2026) (holding derivative sovereign immunity provides a government contractor a defense to liability on the merits of a claim that it may have violated the law, rather than providing the contractor immunity from suit).  

For many private sales of goods and services to incarcerated people, these conditions are not satisfied and therefore the company does not deserve immunity. See NCLC’s Collection Actions §§ 11.6.7.1–11.6.7.2; 41 Am. Jur. 2d Independent Contractors § 64, “Availability to contractor of governmental immunity” (available on Westlaw).

  —Arbitration and Class Action Waivers 

Mandatory arbitration provisions and class action prohibitions are common in the contract terms of private companies operating in the carceral marketplace. For information about how to fight the enforcement of arbitration agreements and class waivers in this context, see NCLC’s Commercialized (In)justice Litigation Guide § V.A. Arbitration. See also NCLC’s Consumer and Worker Arbitration Provisions.

  —Filed-Rate Doctrine 

Claims challenging bail and telecommunications rates may face arguments that the filed-rate doctrine bars such claims. The filed-rate doctrine—also known as the filed-tariff doctrine—is a court-created rule that bars claims challenging rates that a regulatory agency required to be filed or that would have the consequence of imposing rates other than the filed rates. A “tariff” is a public document a regulated company files with the government regulatory agency detailing its services and pricing. The filed-rate doctrine should not apply if the lawsuit does not challenge the specific rates charged or other practices encompassed in the tariff. For an overview of this doctrine and general arguments that it does not preclude suit in most contexts involving incarcerated people, see NCLC’s Commercialized (In)justice Litigation Guide § V.B. Filed-Rate Doctrine. 

  —Individual Variations in UDAP Statutes

While most state UDAP statutes are well suited to challenge practices involving incarcerated people, UDAP statutes have their idiosyncrasies. A significant majority of state UDAP statutes prohibit unfair, unconscionable, and/or abusive practices, but a few prohibit only deceptive practices, which may limit those statutes’ utility for certain types of abuses, including price gouging.

Not all states share the same definition of unfairness, so practitioners must be aware of the definition in the applicable state. Most states still use the S&H standard:

1. Does the practice offend public policy? Is it within at least the penumbra of some common law, statutory, or other established concept of unfairness?
2. Is the practice immoral, unethical, oppressive, or unscrupulous? 
3. Does the practice cause substantial injury to consumers? 

Courts usually hold that a consumer need not establish all three elements to establish unfairness. See NCLC’s Unfair and Deceptive Acts and Practices § 4.3.3.3.1.

Other states adopt an unfairness standard Congress defined for the FTC and CFPB, that the practice must meet three criteria: 

1. The practice causes or is likely to cause substantial injury to consumers; 
2. Which injury is not reasonably avoidable by consumers themselves; and 
3. The injury is not outweighed by countervailing benefits to consumers or to competition.

See NCLC’s Unfair and Deceptive Acts and Practices § 4.3.2.1. 

Twenty state UDAP statutes prohibit unconscionable practices—some prohibit both unfair and unconscionable practices and others prohibit only unconscionable practices, but not unfair practices. Unconscionable is often defined in the UDAP statute itself. See generally NCLC’s Unfair and Deceptive Acts and Practices § 4.4.2.

One of the strengths of a UDAP statute is its broad applicability to most marketplace abuses. Nevertheless, certain UDAP statutes exclude certain transactions, such as those regulated by a state agency. See generally NCLC’s Unfair and Deceptive Acts and Practices § 2.3.3. A handful of statutes require the litigation be in the public interest. See NCLC’s Unfair and Deceptive Acts and Practices § 11.4.3.

  —Retaliation Against Incarcerated Plaintiffs 

Although illegal, reprisal against incarcerated plaintiffs who file formal grievances or lawsuits is a widespread and well-documented reality. Those representing incarcerated plaintiffs should ensure clients adequately understand these risks, take steps to minimize them, and plan with their clients how to address any retaliation that does occur. 

Other Claims to Bring 

When contemplating litigation against private companies operating in the carceral marketplace, also consider claims for unjust enrichment, economic duress, conversion, or third-party beneficiary breach of contract. Claims also may be available under state or federal anti-trust statutes, the EFTA, and the Americans with Disabilities Act. Constitutional claims might include the Takings Clause of the Fifth Amendment, deprivation of property under the Fifth or Fourteenth Amendment, unconstitutional conditions of confinement under the Eighth Amendment, or unconstitutional punishment under the Fourteenth Amendment for people who have not been convicted of a crime.

Acknowledgments

Thank you to NCLC senior attorneys Ariel Nelson and Jon Sheldon for their contributions to this article.