Federal Trade Commission - November 1993

900 Numbers: New Rule Helps Consumers
fast facts

Before dialing a 900 number, there are a few things you should know. For example, how much will the call cost? What will you get for your money? What happens if you have a billing dispute?

Under a new Federal Trade Commission (FTC) rule, it will be easier for consumers to get answers to these questions. This brochure explains what protection you have under the Telephone Disclosure and Dispute Resolution Act and the FTC 900-Number Rule. The rule applies to interstate pay-per-call services, or 900 numbers. The brochure also tells what to watch for in 900 numbers and what to do if you are caught in a 900-number scam.

The Advertisement: What it Should Say About Costs

The following information must be included in print, radio, and television advertisements for 900-number services.

* The total cost of the call if there is a flat fee.

* The per-minute rate if the call is charged by the minute, as well as any minimum charge. If the length of the program is known in advance, the ad also must state the total cost of the complete program.

* The range of fees if there are different rates for different options. The ad also must state the initial cost of the call and any minimum charges.

* The cost of any other 900 number to which the caller may be transferred.

* Any other fees that the service might charge.

This information cannot be hidden in small print. The cost of the 900-number call must be at least half the size of the telephone number.

The Call: What You Should Hear First

When you dial a 900 number that costs more than $2, the first thing you should hear is an introductory message, or "preamble." The preamble must describe the service briefly, give the name of the company providing the service, and tell the cost of the call. Also, it must say that anyone under age 18 needs parental permission to complete the call. Once all this information is provided, you must be given three seconds to hang up without being charged.

The Exceptions to the Rule

The 900-Number Rule does not apply if you have a pre-existing contractual agreement with an information service. Be very careful about entering such an arrangement. If you do, your calls to the service -- and resulting bills -- will not be subject to the rule's requirements.

The rule also excludes calls charged to a credit card. However, the bills for such calls would be covered by the dispute resolution procedures of the Fair Credit Billing Act.

Billing Errors: What You Can Do

To help protect consumers, the new rule establishes procedures for resolving billing disputes. When your telephone bill arrives, check it for any 900-number charges. For each pay-per-call charge, the billing statement should include the date, time, and -- for services that have per-minute rates -- the length of the call. These charges must appear separately from local and long distance charges on your telephone bill. The billing statement must include a local or toll-free number that you can call with questions about your pay-per-call charges.

If you discover an error, the instructions given with your billing statement will tell you who to call or write. In most cases, this will be your local or long-distance telephone company, but it could be the 900-number company or an independent firm that provides billing services for that company.

You must notify the company listed on your bill within 60 days after the first statement containing the error was sent. The company must acknowledge your notice in writing within 40 days unless it has resolved the dispute by that time. Within two billing cycles, but no longer than 90 days, the company must:

* correct the billing error and notify you of the correction, or

* investigate the matter and either correct the error or explain to you the reason for not doing so.

No one can charge you for having to investigate or respond to a billing dispute. In addition, no one can try to collect the disputed charge from you -- or report it to a credit bureau -- until the company handling the dispute has either corrected the error or explained its reason for not doing so. Companies that do not comply with these rules lose the right to collect up to $50 of each disputed charge.

You should be aware that even if the 900- number charge is removed from your phone bill, the service provider might continue to pursue the charge by other means, such as referring the matter to a collection agency. If that happens, you have additional rights under the Fair Debt Collection Practices Act. (See pages 6-7, Complaints: How to Handle Them.)

The FTC Rule: What It Says About Children, Sweepstakes, and More

The Rule also covers other 900-number sales practices. These include services that:

Target children.

Some companies have promoted 900-numbers to children, encouraging them to pick up the phone to talk to a cartoon character. Under the FTC rule, companies cannot advertise or direct pay-per-call services to children under 12 unless they are educational services dedicated to areas of school study.

If the ad is directed to consumers under the age of 18, it must state that parental permission is required to make the call.

Promote sweepstakes.

Some services offer the opportunity to enter a sweepstakes -- and win a prize -- simply by dialing a 900 number and, in some cases, entering some type of code. The FTC Rule requires ads for sweepstakes to state the odds of winning (or how odds will be calculated).

Also, the ad or the preamble must tell you that there is a free alternative way to enter the sweepstakes. You must be instructed on how to enter free of charge or where to get that information.You do not have to call -- and incur a charge -- to enter. This does not apply to contests where you have to demonstrate a skill, such as answering a question correctly.

Offer information on government programs.

Some 900 numbers may provide information about federal programs although they are not affiliated with any government agency. This could mislead some consumers. Under the new rule, the ad and the preamble must state that such services are not authorized, endorsed, or approved by a federal agency.

Use 800 numbers.

The new rule generally prohibits:

* using 800 numbers for pay-per-call services.

* connecting 800-number callers to 900 numbers.

* placing collect return calls to 800-number callers.

FCC Rules on Collect Calls

Under new Federal Communications Commission regulations, pay-per-call services cannot make collect calls to you if the charge would be more than -- or in addition to -- the regular long distance charge for the call. Services that do not impose this additional charge could call collect. However, you cannot be charged for the call unless you have clearly indicated that you accept the charge.

Your Best Protection: How to Avoid 900-Number Problems

Scams involving 900 numbers are constantly changing. In general, you can protect yourself if you:

Deal only with reputable companies.

Some companies or organizations sponsor 900-number services for opinion surveys, sports information, or other topics that may interest you. Before you call a 900 number, be sure you understand the cost of the call and the nature of the information or service you will receive.

Think twice before calling a 900 number for a "free" gift.

Television ads, postcards or telemarketers may urge you to call 900 numbers for "free" prizes. Know that you pay for "free" prizes. Know that you pay for those "free" gifts when you make the 900-number call.

Don't confuse 900 numbers with toll-free 800 numbers.

You pay for the 900-number call. The company pays for the 800-number call.

Talk to your children.

Make sure they understand they shouldn't call 900 numbers without your permission. You can have the phone company block 900-number calls from your phone. Under the new Federal Communications Commission rule, local phone companies must make blocking available (where technically feasible) at no charge through December 31, 1993. After that, telephone companies may charge a "reasonable" fee. However, any subscriber with a new number can request free blocking within 60 days after service begins.

Complaints: How to Handle Them

Under the Federal Communications Commission rule, the phone company can't disconnect your regular local or long-distance telephone service because of failure to pay a 900-number charge. However, you could be blocked from making future calls to 900 numbers for failure to pay legitimate pay-per-call charges.

If you want to dispute a 900-number charge, follow the instructions given with your billing statement. It will tell whether you can dispute a charge by phone or whether you need to write a letter. The billing statement should list a local or toll-free telephone number you can call to learn more about your rights and responsibilities. You also can call to get the name and address of the 900-number service provider.

When disputing a charge, include the following information: your name and telephone number, the date and amount of the disputed charge, and the reason you believe the charge is in error. Even if your dispute is resolved by the billing agent -- and the charge is removed from your phone bill -- you still could be contacted by the pay-per-call service or by a debt collector.

If you are contacted by a debt collector, you have certain rights under federal law. For example, if you do not wish to be contacted again concerning the charge, you can write to the collection agency telling it not to contact you. Under the law, once the collection agency receives your letter, it cannot contact you again except to say there will be no further contact or that some specific action will be taken (if the debt collector or creditor intends to take such action).

Because the debt -- if not resolved -- can remain on your credit record, you also are legally entitled to dispute the report. Even if you are unsuccessful in having the disputed item removed by the credit bureau, you can have your account of the incident included in your credit report.

If you are having problems with a 900-number service, you may want to file a complaint with the FTC. Write: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. While the Commission does not resolve individual disputes, complaints about 900-number scams help the FTC in its law enforcement efforts against companies.

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