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The Law and 900 Telephone Charges: XYZ Company

A large company (XYZ) owns a local telephone service. XYZ company allows the telephone service company to run 900 numbers for dating services, chat lines, and psychic hot lines. These charges often blend into the small print on the bill and are shown as charges from the XYZ company instead of the dating service, chat line, etc. Let's say for the sake of argument that the Smiths did not check their bill and was not aware until they were contacted about the deliquent charges. And the 12 year old grandson made the calls. I am writing a paper on the legal and ethical environment involving consumers. They have since hired an attorney.

1. The Smith's did not follow the quidelines as indicated on FTC Rule Helps Consumers concerning 900 numbers. Would they still have laws to protect them from these types of practices? Need web sites to use to answer this question and document my findings.

2. What policies should XYZ company have in place to address future problems. Please advise web sites to document these policy recommendations.

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900-Number Rip-Offs

While there are legitimate 900-numbers being used to promote products and services, many businesses have also become targets of telemarketing scams involving 900-numbers. XYZ company's callers to telephone numbers with prefixes such as 900, 976, and 540 may be charged anywhere from 50 cents a minute to 50 dollars a call. Furthermore, many 900-number scam operators hike their profits by putting callers on hold or otherwise prolonging the call to multiply their per-minute charges.

XYZ Company could have found thousands of dollars charged to their telephone bills when employees have been targeted with prerecorded telephone messages promising that a "gold" card or some other desirable service is just a telephone call away. Typical scams have involved TV ads and recorded telephone messages promising services, such as:

Â? Real estate or job listings. Callers usually end up paying to listen to a recording of listings taken from local newspapers or other publicly available sources.
Â? A "gold" credit card. Often these so-called gold cards can be used only to buy over-priced merchandise from the promoter's own catalog-and there may even be an extra charge for obtaining the catalog.
Â? A bank credit card, available "regardless of credit history." All the caller usually receives is a list of banks offering low interest or secured credit cards. The list the caller receives, usually for a very high price, often can be obtained at far less cost through financial magazines, newspapers, or legitimate credit organizations. In another typical scam, the caller may be sent a "how- to kit" of virtually worthless generic information on reestablishing credit.
Â? Bank loans. Again, the caller usually receives nothing but a list of lenders, or a generic information package on applying for a loan. ...

Solution Summary

The 1225 word solution provides a great deal of information on the subject of 900 phone call charges including liability, recourse and response by the phone company. The OTA further refined the solution after more specific questions from the student.