WOMEN INSIDE IN DEBT
THE PRISON AND DEBT PROJECT
Anne Stringer
Manager Prison and Debt Project, CRC Justice Support, NSW
Paper presented at the Women in Corrections: Staff and Clients Conference
convened by the Australian Institute of Criminology
in conjunction with the Department for Correctional Services SA
and held in Adelaide, 31 October – 1 November 2000
Introduction
I robbed to get some stuff out of a pawnshop.
I know inmates that have come back virtually straight after getting out because they owed so much money that they got depressed and committed a crime to pay off debts.
I broke into cars to get money to pay off Myers and David Jones accounts. It was certainly an encouraging factor to commit crime, having those bills. It’s just common sense: people in here have bills -- they won’t get paid, they get worse. They get out and do something else to pay them, see what I mean?1
The Prison and Debt Project is concerned with the links between imprisonment, debt and crime – or, simply put, the effect of imprisonment on prisoners’ debts, the effect of prisoner debt on the families of prisoners, and the impact of debt on the crime rate.
Prompted by a growing body of anecdotal evidence on the debt problems of prisoners and their families, funding was applied for and granted by the National Consumer Trust Fund in 1998. Using this funding, the project conducted research over a 12-month period to investigate and describe the cause, extent and effects of debt problems amongst prisoners and their families, with the principal objective of taking the findings as a basis for advocacy to bring about change. The research was conducted in Queensland from the Prisoners’ Legal Service, in partnership with the Social Policy and Economic Research Centre of the University of Queensland (SERC).
In October 2000, the project received an additional 12 months funding from the Community Education Trust Fund, to be used for implementation of the interventions identified by the research. The project is now housed at and auspiced by CRC Justice Support, Sydney. This paper begins by summarising the key points uncovered by the research, followed by a brief description of the methodology, a summary of some of the findings (with particular emphasis on women as prisoners and family members) and ends with a an account of the planned future direction of the project
A full account of the research and its findings is available in The ‘Prison and Debt Report’, available from the author. (Contact details at the end of this article).
Summary
The Project found that:
• debts are created unnecessarily by a prison sentence;
• existing debts increase unnecessarily during imprisonment;
• family members impoverish themselves by unnecessarily paying prisoners’ debts.
1
While:
• remedies, advice and information available to the wider community are not available to or accessible by prisoners and their families and
• the current prison environment actively contributes to these problems by imposing internal barriers to effective debt management.
Most prisoners find that on release they are unable either to repay their debts or to manage them effectively. This is a hindrance to successful rehabilitation and could lead to increased recidivism. (49% of prisoners interviewed said that they had committed a crime to repay a debt.)
During the term of imprisonment, families often suffer the most from prisoners’ debts: they may worry more about debts, they may be harassed by debt collectors, and they may lose much-needed income repaying debts that they did not incur.
Many are unaware of their rights and are vulnerable to unlawful or unprincipled debt collection practices.
Methodology
The project used a combination of research techniques, including a survey by questionnaire of 121 prisoners and 4 follow up interviews, plus focus groups and unstructured interviews with key stakeholders. The project benefited enormously from the involvement of SERC, which, for instance, ensured that the data collection and analysis were sound in terms of current methodology and which overall proved to be a very effective alliance of academic resources and research expertise and access to community based sources and experience.
Action Research
While the research was being conducted, the project was also working towards bringing about positive outcomes for participants. For instance, not only did the focus groups provide the project with data; they were also a valuable source of information and assistance for those taking part and, indirectly, the wider community. In one case, financial counsellors attended a focus group of service deliverers where many of the attendees were not aware of the services they offered. As a direct result, access to financial counselling services was improved by the publication in two community newsletters of information given at the focus group.
Information collected by the project on, for instance the procedures for making re negotiating Child Support Agency payments or for accessing superannuation funds, was outlined and published in the Report for use by caseworkers.
Every prisoner, ex-prisoner and family member who was interviewed, or who contacted the project, was encouraged to raise any problems they were currently experiencing with debts or related issues. As a result, 12 inmates and 4 family members were referred to sources of assistance, including to financial counsellors, lawyers and officials from government
departments. The project followed up on the referrals and found that in all cases appropriate assistance had been received.
Prisoner Interviews
A total of 121 prisoners from four prisons were interviewed face to face, using a questionnaire. Four unstructured follow-up interviews were conducted with prisoners, furnishing more
detailed information and data on intangibles such as attitude.
Prisoners volunteered to be interviewed following explanations of the project given to groups of prisoners, during which it was emphasised that the research was not in any way connected with the government, nor was it an academic project remote from their concerns and interests, but rather that the research would be used to bring about concrete improvements to their and their families’ financial situations.
Focus Groups
A number of focus groups were held:
• three groups of prisoners’ family members (1 with older family members, 1 with young women, and 1 with family members of ‘lifers’);
• four of prison welfare officers (1 group in each of the prisons surveyed);
• three of representatives from community-based organisations and
• two of financial counsellors.
Stakeholder Interviews
A number of interviews were conducted with key individuals, from, for instance, government departments non-governmental organisations, and finance industry bodies and with ex-prisoners and representatives from indigenous organisations.
Findings
Prisoner Debt Profiles
• 80% of the total sample had some debt when they went to prison.
• There was a significant difference in the amounts owed by women and by men. The average amount owed by women was $3,417, that owed by men was $16,060.
• Women owed a higher dollar amount to family and friends than was reported by men, who said that they owed more money to financial institutions.
• The average amount owing to financial institutions among women was $2,101, among men $7,198.
• 30% of all prisoners had housing debts. No female prisoners had housing mortgage debts but 5 males had.
• 37% of all prisoners had debts to government agencies.
• Women owed on average $831,men owed $5,939 to government agencies. (The amount owed by men includes three significant debts to the Child Support Agency and one large amount owed to the Australian Taxation Office, which substantially increased the average amount owed to government agencies by men). Debts to Centrelink were an average of $474 for women and $718 for men.
Women Prisoners
Of the total sample of 121 inmates surveyed, 20 were women. This reflects the percentage of women in the prison population. Six indigenous women prisoners were interviewed (30% of all women interviewed).
• 60% of women prisoners had dependent children.
• Slightly more women (44%) than men (38%) cited drugs as a main cause of debt.
• 56% of women said they had committed a crime to pay a debt, compared to 40% of men. Imprisonment Causes Debt
Just over 20% of prisoners who completed the questionnaire reported that they had incurred debts while in prison.
Debts caused by imprisonment are most commonly owed to government agencies. Typically, these agencies are not informed of the incarceration in time to prevent debts accumulating; representative examples include:
• many newly sentenced or remanded prisoners are receiving a Centrelink allowance at the time of their incarceration. Often, because Centrelink is not aware of the prison sentence, one or two payments will be made to prisoners, payments that they are not entitled to receive. This money may either be accessed and spent by the prisoner, who may not be aware that they are not entitled to the money, or, it can be fraudulently obtained and spent by friends or family members.
• If the Child Support Agency (CSA) is not made aware of the imprisonment, they will assess the prisoner at their previous level of income and will continue to add interest to any debt. This can, in a relatively short time, result in the CSA claiming for payment of a very large amount of money, which is not necessarily owed to them in the circumstances.
• Debts may be accrued to the Australian Tax Office for penalty payments for tax returns not filed, and
There are no clear policy guidelines in the Queensland Department of Housing regarding procedures to be followed when a tenant is imprisoned. For instance, some offices impose a debt on the prisoner for 2 weeks’ rent in lieu of notice of ceasing to rent the property. Most prisoners are not in the situation of being able to give 2 weeks advance notice of leaving the property.2Debts incurred in prison may be under-reported in our survey, either because during initial interviews prisoners did not recall all their debts or because they were not aware of them at the time. For instance, debts that ex-prisoners reported that they were not aware of until their release included debts to HECS, to Centrelink, and rental and taxation debts. In follow-up interviews with prisoners, debts that they had not mentioned in the first interview included
2
Most prison sentences served in Australia are short. About one in eleven sentences are less than 1 month. A little over 21% of the prison population serve under three months and only about 42% spend over a year in prison. The “Prison and Debt Report” recommends that short term prisoners be enabled to maintain their homes for 6 months at a reduced rental, repayable over time. The loss of accommodation due to a short period of imprisonment is highly deleterious to rehabilitation chances and must pose a considerable cost to the community in emergency housing etc.
debts for CDs and video games bought in prison, debts to the authorities as a result of mistakes in trust account-keeping, and one case in which money from a trust account was overspent contrary to the prisoner’s direction, thus incurring a debt to a third party.3
Imprisonment Increases Debt
I’d like to know if there’s anything you can do. I’ve left them (my debts) because I don’t know what to do.
The bank insisted that the only way I could make an arrangement with them about the debt was to come into the office for an interview. They wouldn’t accept that I was in jail.
Imprisonment, in addition to causing debt, also brings about unnecessary increases in existing debt levels. Prisoners find themselves in a state of suspended animation, where they are unable to make repayments but, meanwhile, the prison system makes it impossible to negotiate with creditors. Interest on the debt continually increases, goods are repossessed and legal costs for debt collection are added to he original debt. When the prisoner is released she often has an unpayable debt, a bad credit rating and has lost assets such as her car, furniture and house. The prison system increases debt levels by imposing barriers to possible solutions:
• information on effective debt management and remedies for debt problems is not available in prisons;
• appointments with prison welfare counsellors who may be able to advise prisoners about their debts may be difficult to arrange because the staffing level of counsellors has not been augmented to meet the increase in the prison population;
• some prison staff are attitudinally opposed to measures that relieve prisoners’ financial problems;
• prisoners do not know how to contact other professionals who may be able to advise them (eg financial counsellors);
• telephone communication with creditors for the purpose of negotiating arrangements/debt rescheduling is hindered by restricted access to telephone calls;
• it has been reported to the Project that documents such as those needed to declare bankruptcy may be posted to an inmate but are sometimes lost in the system and not delivered and
• the negotiation of debt rescheduling with creditors (most of which must specify a
commencement date for future repayments), is made difficult by uncertainty about release dates and by sudden movements from one detention facility to another (‘shanghais’); Prisoners may also have or develop attitudes or conditions that prevent them from seeking to manage their debts, including:
• they may have other problems that seem more pressing, for instance, they may be worried about their children or their legal situation;
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Two prisoners received, while they were in prison, unsolicited offers of loans of $5,000 from finance companies, which they did not accept.
• because they have no access to information to the contrary, many prisoners believe that the only solution to problems with debts is to find the money to pay them. They generally do not have money, nor any prospect of getting money, while in prison. They may then make the decision not to worry about a problem that they are convinced they cannot resolve; or
• they may be addicted to drugs or gambling so that paying debts accrued in prison becomes a priority.
Drugs and Debts in Prisons
Debts in here are different from those outside. Debts in here mean you have to worry about your life. These debts are a major problem for prisoners.
The study gathered data on legitimate debts (those to financial institutions, government bodies, friends, family, loan sharks etc.) and also on illegitimate debts (those incurred through
gambling or drug use).
Drug use is a major contributor to indebtedness among prisoners. Debts for drugs and debts associated with drug use (for instance, ambulance bills, high mobile phone bills) are common in prisons.
Measures to improve prisoner debt levels, such as those suggested by this Project, must be taken within the context of ongoing preventative and treatment strategies for drug use and gambling. This issue is addressed in detail in the Prison and Debt Report.
Debts after Release
If a Telstra bill has not been paid, then you can’t get a telephone connection. So you can’t get home detention, because you need a telephone.
Centrelink could come in and explain what happens about overpayments because as soon as you walk out you can be arrested again for fraud.
It is extremely difficult for any ex-prisoner to establish a stable life on release when income and housing options are significantly reduced by debts owed to agencies such as Centrelink and the Housing Department. Many ex prisoners also have debts for utilities such as telephone and electricity and so may not be able to obtain these services without paying a security deposit, which they do not have. These financial barriers to establishing a home will further marginalise the ex prisoner and, with the best will in the world pose insuperable barriers to rehabilitation. Women Ex – Prisoners
The debt profile of the women in our sample differed considerably from that of the men.
Among other differences, women owed a higher percentage of their debts to Centrelink and for housing and utilities. (Men owed proportionally more of their total debt to financial
Women ex-prisoners are more vulnerable to the negative effects of these debts than are their male counterparts: they are more often solely responsible for dependents and are therefore more reliant on welfare services, and because they are trying to provide a stable home for children, they tend to be more geographically stable and therefore more to debt collectors. Greater mobility offers men the option of moving to avoid debts.
Additionally, there is anecdotal evidence that on release, male ex prisoners are likely to benefit from the greater stability of women by, for instance, moving into an established family unit with a female partner or their mother. In these cases, the woman is the leaseholder for the household and the man can avoid paying any prior housing or utility debts, because he cannot be traced.
Families
As surely as the doors of the prison shut, so too will many doors for the family outside. The difference is that the prisoner is provided with three meals per day and does not have to face his debtors.
They’re the ones who’ve left you with the debts, the baby, the children crying because they’ve seen their father taken away.
Families suffer more than the community is aware of. Victims of crime have some ways of getting help, families have nothing.
I have a lady with four kids whose husband is in jail. She separated from him and had to move from the house they had lived in. But she can’t get the bond money back on her previous house because he refuses to sign the form and she is too ashamed to tell the Department the full story.
Ann Aungles4 describes the destitution of the family outside prison as a ‘shadow punishment [which] is marginalised and largely invisible to the public gaze’.
The project found that during the term of imprisonment, much of the burden of debt (worry about debt, harassment by debt collectors, diminishing available income due to debt
repayments) falls on family members of prisoners, many of whom are unaware of their rights and are vulnerable to unprincipled and unlawful/ debt collection practices.
Family members, may already be severely financially disadvantaged by the loss of one income and by the additional expenses of having a prisoner in the family (eg travel expenses for visits, STD telephone calls, providing money to prisoners for ‘buy-ups’5, being obliged to buy items for the prisoner, such as socks from the expensive prison shops rather than from chain stores). Families often further impoverish themselves by repaying prisoners’ debts. They may make these repayments for a variety of reasons, including:
4
Aungles, A., 1993,‘Prisons - Penal Policies: the Hidden Contracts’, Women and the Law: proceedings of a conference held 24- 26 September 1991 edited by Patricia Weisen Easteal and Sandra McKillop, Canberra: Australian Institute of Criminology, pp 251 -262
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Small shops operate in all correctional centres where, if they have money in their account, prisoners can purchase food, toiletries etc., in weekly ‘buy-ups’.
• they believe they are legally liable to make them
• they are being harassed by debt collectors
• they under pressure from the prisoner, or
• they want to make the repayments to preserve an asset such as a car.
There are remedies, information and assistance available to those in the wider community who have debt problems. They may, for instance:
• under the Fair Trading Act, stop unlawful debt collection practices such as repeated phone calls, often made at unreasonable hours or to employers;
• make arrangements for lower repayments and waivers on interest under the Credit Code, which has provisions for hardship variations;
• access their credit record and change inaccurate entries or
• enter into voluntary bankruptcy.
These resources are largely inaccessible to prisoners, ex-prisoners and their families for a variety of reasons (many of them identified in this research).
Solutions
The two primary objectives of the Prison and Debt Project are to ensure that existing remedies are made available and accessible to prisoners and their families, and to minimise the
generating of prison-caused debt. The Prison and Debt Report identifies 42 possible interventions towards meeting these aims.
The Project has recently received a further twelve months’ funding in order to implement some of these interventions.
Drawing on the 42 interventions identified in the Report, this phase of the project intends to focus on the following 3 strategies:
♦ To prevent the generation of prison-caused [see above] debt:
• the production of an induction Kit for use by correctional officers on the induction of new prisoners, to include: form letters to Centrelink, the Department of Housing, the Australian Tax Office, the Child Support Agency (CSA), utility providers and private sector creditors to inform them of the period of imprisonment and to seek waivers, etc. where appropriate.
♦ To improve access of prisoners’ family members to existing remedies and resources:
• the production of basic information booklets to advise family members on how best to cope with debts when a family member is imprisoned. The booklets to be widely available and prominently displayed in areas where family members are most likely to see them, such as courts and prison visiting areas. Contents to include basic
information on: debts in the prisoner’s name; debts in joint names; harassment; options such as bankruptcy and negotiating lower payments, referral to further advice and assistance.
♦ To improve access of prisoners to existing remedies and resources:
• encourage the introduction of financial counselling casework into prisons, by, for instance, training prison welfare officers or introducing an outreach financial counselling service into prisons, or a combination of the two and
• facilitate the production of pre- and-post release financial management education and information courses for prisoners and ex-prisoners.
These harm-minimisation and empowerment strategies must be carried out within a wider framework of ongoing prevention and educational programmes in, for instance, literacy and numeracy development, substance abuse and problem gambling.
Conclusion
Increasingly out of control indebtedness is one factor propelling the vicious cycle of poverty, crime and imprisonment. (49% of prisoners in our sample said that they had committed crime to repay a debt.)
Our research indicates that imprisonment itself gives rise to new debts, while at the same time imposing barriers to debt management and preventing access to the assistance that is available to the wider community.
The measures proposed here to address these inequities would cost very little and involve minimal structural change, yet the benefits will be substantial.
They will make a significant contribution to families’ ability to survive the imprisonment of a family member and to the willingness and capacity of the newly released prisoner to negotiate the crucial post-release period successfully.
Author’s Note
Although this is a new area of formal investigation, many readers are familiar with the issue and its implications. Any comments on the research or on what the project is planning to do over the next twelve months are very welcome. Send them to:
Anne Stringer
Manager, Prison and Debt Project C/ CRC Justice Support 174 Broadway Broadway Sydney NSW 2007 Phone: 02 9288 8718 (BH) 9566 1535 (AH) 0415 700 143 (MOBILE) Fax: 02 9211 6518 E-mail:annestr@dot. net. au
