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Pay-Per-Call Scams Ring Up Big Bills for Consumers
A Baltimore consumer received a call on his beeper at 1 a.m. The return number was a 976 extension. He immediately called back, not knowing that 976 extensions in Maryland are pay-per- call numbers, much like 900-numbers. He reached a chat line and quickly hung up.
A Cumberland woman answered a newspaper ad offering an opportunity to work from her home. She called the number listed in the ad, then called another number as directed. She did not get a job as the result of her efforts, but she received nearly $50 in phone charges. She had unknowingly called a pay-per-call number in the Dominican Republic.
A recent spate of pay-per-call scams has left unsuspecting consumers holding big phone bills. The cases above are complaints actually received by the Consumer Protection Division within the last few months. In addition, warnings have surfaced on Internet Bulletin Boards and in other places of similar scams.
In bulletin board messages and e-mail, many consumers said they had received answering machine messages urging them to call an 809-number to receive information about a relative who was ill, claim a prize or straighten out an urgent credit problem before their account was sent to a collection agency. In each case, the information was false but the calls resulted in expensive phone bills from the Caribbean number. Calls to this area code are billed at a higher rate than a regular international call.
Recently, even more area codes have been added for the Caribbean. At this time, there are 19 such area codes.
In the United States, 900-number calls must contain a preamble at the beginning unless the call has a flat rate of $2 or less. The preamble must clearly disclose the cost of the call, give the information provider's name and describe the service. To avoid being charged, you may hang up within three seconds after the signal or tone indicating the end of the preamble. Local phone companies must offer one-time free blocking of 900 services where technically possible.
In Maryland, local pay-per-call numbers (976 and 915) must include the same preamble and hang-up options as 900-numbers.
while consumers generally assume that calls to 800 numbers and the new
888 area codes are toll-free, charges are occasionally connected to these
numbers. Sometimes consumers call an 800 or 888-number only to be directed
to a different number that is not toll-free. In addition, charges can
sometimes be incurred for calls to these otherwise toll-free numbers.
Companies that provide audio entertainment or information services are
permitted to charge for calls to toll-free numbers, but they must follow
the FTC's 900-number rule and inform you of the charge before you incur
There are currently no such protections on pay-per-call numbers outside of the United States, although Maryland and many other state attorneys general have asked the Federal Trade Commission to toughen its regulations in this area to end the new pay-per-call scams.
What You Can Do
Before you return a phone call, be sure you know where the area code is located. To find out, check your phone book, your local telephone company, or, on the Internet, http://www.bellcore.com/NANP/codes.html lists area codes and their locations.
Listen closely to what is being said at the beginning of a call to see if you are being told that you will be billed.
If you find you have been the victim of a pay-per-call scam, call your local telephone company immediately to find out how to dispute the charge. You can ask the phone company to delete the charge, but they are not obligated to do so. You can also file a complaint with the Consumer Protection Division.
An Owings Mills consumer signed a one-year cellular phone contract. About a week before the contract expired, the consumer notified the company in writing that he did not want to renew the contract. He was billed a $150 cancellation fee. It turns out his contract contained an automatic renewal clause that said he had to notify the company one month prior to the end of the contract if he did not want to renew.
Many companies now offer discounted cellular phones and beepers in return for long-term service contracts. You might not have to pay for the phone, but in return you must sign a one-year contract for service with the company that is giving you the phone.
If you shop around for monthly service prices, you might find you are better off buying the phone and signing with a company that offers a shorter contract or service that costs less each month. In some cases, the monthly phone fee you'll pay with your "free" phone is so high that you end up paying more than if you had bought the phone outright.
In most cases, the lower the monthly fee, the longer the contract term. Before you sign up for a year of service, be sure you will be getting the amount of service you need. If you sign up for unlimited service but only make 3 calls a month, you might end up paying more than you have to.
Before you sign a service contract, carefully read all of the terms. Be sure you understand your cancellation rights and restrictions. With many cellular service contracts, you owe the full amount of the contract even if you cancel before it ends. Some allow you to cancel early but charge a fee for doing so.
Attorney General of Maryland 1 (888) 743-0023 toll-free / TDD: (410) 576-6372