Enormous growth and lack of meaningful regulation have made 900 telephone numbers a haven for con artists, a group of state attorneys general say.
A study of the pay-per-call services by a task force concluded that they have "emerged as one of the most significant vehicles for consumer fraud in recent history," said Pennsylvania Attorney General Ernie Preate, a member of the task force.Fraudulent practices discovered by the task force include phony job offers, misleading credit card solicitations and supposedly free vacations with enormous hidden costs, Preate said.
"We also found that many 900-number advertisements either fail to adequately disclose or grossly understate the actual cost of the calls," he said.
The industry now generates about $750 million worth of calls annually.
The task force composed of attorneys general from nine states concluded that long-distance companies such as American Telephone & Telegraph and MCI are best able to police 900-number fraud because those firms carry the calls on their networks and handle customer billings.
The group is recommending that long-distance carriers refuse to handle 900 numbers that are targeted at children or deal expressly with sweepstakes, job opportunities and credit cards, and that they require 900-number companies to disclose the full cost of the service in their advertising.
Preate said strong federal or state legislation also may be needed to regulate the 900-number industry.
The report also recommended that consumers be told at the beginning of each 900-number call what the call will cost and be given a chance to hang up at no charge, that local telephone companies offer free 900-number blocking and that local and long-distance telephone companies grant liberal bill adjustments when 900-number services fail to provide proper price notice or provide fraudulent services.