Thursday, June 19, 1997

WHAT ABOUT PAY-PER-CALL

The National Consumers League, the oldest nonprofit consumer organization in the United States, welcomes the opportunity to participate in the public workshop convened by the Federal Trade Commission to address "pay-per-call" issues that have arisen since the Telephone Disclosure and Dispute Resolution Act of 1992 was enacted. Based on the calls that the League's National Fraud Information Center receives concerning pay-per-call services, it is clearly time to review the FTC's 900 Number Rule and hang up the phone on companies that defraud and deceive consumers and legitimate members of the information industry.

The NFIC provides a hotline, 1-800-876-7060, and a web site, www.fraud.org, through which consumers can get general advice about telephone, online or Internet solicitations and report possible fraud. Consumers' reports are uploaded daily to the database maintained by the FTC and the National Association of Attorneys General, and transmitted to a variety of individual federal, state and local law enforcement agencies.

While reports of pay-per-call abuses have decreased overall, from the 8th most frequent problem reported to NFIC in 1992 to 16th place in 1994, they increased to 12th place in 1996. The types of abuses have also evolved. In 1992, most involved 900 numbers, but by 1996 the NFIC received three times as many reports concerning charges for calling 800 numbers as 900 numbers. Reports of pay-per-call scams using international phone numbers are also on the rise.

The recent "Moldova incident," in which consumers' Internet service was hijacked when they downloaded a picture viewer from a certain web site, and reconnected via an international phone call to eastern Europe, served as a stark example of how difficult it is to anticipate changes in technology and ensure that the old ground rules for fair trade still apply.

While the issues revolving around pay-per-call services are complex, we can protect the interests of consumers and legitimate members of the industry by agreeing that:

• Presubscription agreements to pay for calling 800 numbers should be confirmed in writing. Documenting the agreement would reduce fraud and disputed charges;
• Consumers need as much information and protection in pay-per-call services using international phone numbers as in 900 number calls. If we can't find a good solution at this time, perhaps use of international numbers for these purposes should be banned;
• Pay-per-call promotions on the Internet should clearly state all terms and costs. The industry should help develop guidelines to ensure adequate disclosure;
• Consumers should not be intimidated from disputing pay-per-call charges or unfairly barred from access to telecommunications services. Information providers have chosen to use this medium to sell their services and collect payment. The burden should be on them to show that consumers made the calls and understood the terms. If they cannot, consumers should be given the benefit of the doubt for disputed charges.

Links for Non-Frames Version
| Current News & Views |
| Subject Index of Past Articles |
| Chronological Index of Past Articles |

| About NFIC | About the National Consumers League |
| About the Alliance Against Fraud in Telemarketing | 
| Telemarketing Fraud | Internet Fraud Watch |
| Fraud Against the Elderly | 
| News & Views | Links | For the Media |
| How to Report Fraud & Ask Questions | 
| Back to Welcome Page (Frames Version) |

NFIC is a project of the National Consumers League. 
All rights reserved. © 1997.