| ***facts*** | for Consumers |
|-------------|---------------|

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**Federal Trade Commission -November 1993**

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900 Numbers: New Rule Helps Consumers ***fast facts***

| - Under a new FTC rule, 900-number services                (pay-per-call services) must provide:     
- Information in their ads about the cost of the                call, whether it's a flat fee or a per-minute                charge.     
- An introductory message (preamble) that gives the                name of the 900-number company and the call's                cost.  The preamble must give callers the                opportunity to hang up without charge.     
- Procedures for resolving billing disputes.                Billing statements must include a local or                toll-free number consumers can call with                questions about pay-per-call charges. |
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| Bureau of Consumer Protection Office        of Consumer & Business Education        (202) 326-3650 |
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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. 6/90; 9/92