The focus of the following article will be on the new fraud issue of 800 telephone calls that are converted into 900 type of calls, which are commonly called "Pay-Per-Call" by the F.C.C.

TELEPHONE FRAUD ALERT!
So you thought that all of your telecommunications problems were solved when you had your PBX switch AND Telephone Call Accounting (TCA) systems updated to handle the new federally mandated change in the new North America Numbering Plan (NANP) that went into effect on January 1, 1995. Then you had to readjust to all of those new crazy area codes.

Well, you guessed wrong!! A new threat is at your door that is just as serious and could ruin your balance sheet. Many of our clients have been sending us copies of outrageous telephone bills from their own local telephone company for "900" telephone calls even though they have blocked "900" and "976" from their own PBX and had also filed with their local exchange company to block these calls. So how did these calls go through? Through a method that is at best very questionable. The "900" information services (IS) operators are using "800" numbers that they turn into a pay by the minute call, these are called "Pay-Per-Call". Since "800" service is paid for by the subscriber (owner of the 800 number) they are entitled to receive a call detail report from their "800" provider with the called time, call origination telephone number, and the duration of the call. The provider then sends the invoice to your local exchange company, who in turn bills you.

On numerous occasions, we have tested these numbers and quite often no warning is given to the user that they will be billed for the call. Other times a warning was given to the caller that if they stayed on the line, they would be charged, but the hotel's Call Accounting System shows the call as an "800" call and the guest never pays the outrageous rates that you will be billed for. We tried several of these "pay per minute" 800 numbers from pay phones and to our surprise we received recordings from our Local Exchange Company stating your call cannot be completed as dialed"; on other occasions the call went through.

We have seen calls for $14.95 a minute with calls lasting well over an hour! Many of the alternatives to collect the "900" call's charges after the guest departs usually does not work well or even worse, can put the guest into an embarrassing situation which prompts him/her not to return to your hotel. This causes the hotel additional lost revenue.

I wish that I could publish a list of those "800" numbers, but as soon as we compile a list, 20 new numbers have been added. Some of the 800 long distance providers are not aware that their service is being used in this fashion. Others could care less as traffic is traffic. So what can you, the hotelier do about this?

We recently learned from a letter sent by the F.C.C. that there are several guidelines that the information provider (IP) MUST adhere to in order to assess any charges for "800" calls. Basically the guidelines are as follows:

1. The caller must enter into a "presubscribtion or comparable agreement" with an Information Provider (IP), under this agreement there are a whole host separate guidelines. Some of the guidelines include that the service provider clearly and conspicuously informs the consumer of the terms and conditions under which the service is provided, including rates.
• The name, address and business telephone number of the IP.
  
• The IP must notify the consumer of any future rate changes.
  
• The consumer agrees to use the service on the terms and conditions disclosed by the provider.
  
• The service provider requires the use of an identification number (PIN) or other means to prevent unauthorized access by non-subscribers.
  
  
2. A caller cannot legally establish an arrangement that binds another party - the subscriber to the originating line (Hotel, Hospital, dormitories, etc.)
   
   
3. A presubscription arrangement may not be established during a telephone call for which information services are assessed.

To me this indicates that if these calls are billed to your hotel or hospital and YOU have not formally agreed to accept these charges, then you are not legally liable for the charges. It is also important to know that the F.C.C. clearly states that the burden of proof is on the Information Provider (IP).

Several courses of action MUST be undertaken by your property and any hospitality association that you belong to. You must start a letter writing campaign to BOTH your local PUC AND to the F.C.C. The F.C.C.'s address is: ENFORCEMENT DIVISION, COMMON CARRIER DIVISION, 2025 M Street N.W., Washington, D.C. 20554. You should send copies of sample billings with your letter. The address to write to in California is: ATTORNEY GENERAL, STATE OF CALIFORNIA, Attention: Telemarketing, 300 S. Spring Street, 5th Floor North, Los Angeles, CA 90013. Each state operates under different laws so you may have to write to the Attorney General as well as the PUC. You can usually find the correct addresses in your state by looking in the front of your Regional Bell Operating Company ( i.e., America West, Pacific Bell, NYNEX, etc.) white pages telephone book or under State Agencies. If you have not been hit by these charges yet, you better start looking at your telephone bills.

We have developed a very specific letter for the lodging industry that should be typed on your letterhead stationary and sent to the F.C.C. Most hotels are already paying for a special type of toll trunks which has specific call restrictions on them. In addition to all of the above information, we, the lodging industry, should make the F.C.C. AND THE INDIVIDUAL PUC'S aware of this equipment.

Les Spielman is president of Hospitality Automation Consultants Ltd., an independent consulting firm. With more than 20 years of experience in the lodging business, he provides assistance with automation tasks on a personalized basis. Hospitality Automation Consultants Ltd. has successfully completed over 2,000 consulting projects throughout the world. He was just reelected to his third consecutive term to the Board of Directors of the Society of Telecommunications Consultants. His practice is global. Spielman welcomes inquiries at:

Hospitality Automation Consultants Ltd
Valley Village, CA 91607
phone: (818) 763-4449
fax: (309) 403-4035,
Send e-mail to HACL

return home • services • our people • what's new • articles • profile • code of ethics • contact HACL