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Hung up on sky-high pay phone rates

California should require all pay phones to clearly disclose prices for calls made with credit cards. Charges for such calls, even brief ones, can be exorbitant and snare unsuspecting travelers.

July 08, 2011|David Lazarus
  • California doesnt require pay phone companies to disclose credit-card surcharges. Above, a pay phone customer in downtown L.A. in 2007.
California doesnt require pay phone companies to disclose credit-card… (Myung J. Chun, Los Angeles…)

In this hyper-connected age of cellphones and iPads, few of us have to use pay phones anymore. But it still happens, especially when you're traveling.

Ronna Kizner, 56, of Lakewood had this experience recently when she needed to touch base with her husband after landing at Los Angeles International Airport. Her cellphone wasn't working, so she sat down at one of the pay phones in the terminals.

The sign on the phone said local calls cost 50 cents. However, Kizner didn't have enough change, so she charged the call to her credit card.

Big mistake.

Kizner checked her card activity online later and saw that her 20-second chat with her husband had cost $19.98.

"How could that possibly be?" she asked me. "The sign said 50 cents for a local call. I would have never made a call if I thought I'd be charged almost $20."

It's pretty well known that pay phones nowadays can charge exorbitant fees. But what happened to Kizner illustrates a problem that seems to border on fraud: posting the price for making a call with coins but hiding the fact that if you use your credit card, the sky's the limit.

Section 742.3 of California's Public Utilities Code requires that pay phones include a notice that "surcharges may apply to operator-assisted and calling card calls." But there's no such disclosure requirement for calls made with credit cards.

The pay phones at LAX are operated by a Northern California company called Pacific Telemanagement Services, which says it's responsible for more than 40,000 pay phones at airports, gas stations, hospitals and prisons nationwide.

However, the $19.98 charge on Kizner's bill was from a San Diego company called BBG Communications, which serves as a subcontractor for Pacific Telemanagement Services for calls using credit cards. BBG bills itself as "an industry leader in operator-assisted services."

The company is no stranger to disgruntled customers. The Internet bristles with complaints from people who say they paid huge sums to BBG for brief calls. The Better Business Bureau gives the company a grade of "F" for having received more than 500 complaints over the last three years.

BBG declined to comment. (That is, the woman who answered the phone said the company doesn't discuss its rates and then she hung up on me. No one returned my subsequent calls.)

It's perhaps a sign of BBG's wariness of accountability that the company has filed to operate under no fewer than 51 names since 2008, according to the San Diego County Clerk's Office.

Last month, for example, BBG filed to also operate as Airport Call. In October it filed to operate as Faircall. Last June it filed to operate as Credit Phone. A year earlier it was Telecom Call, and a few months before that Yak Communications.

Sometimes companies file for so-called fictitious names to accommodate new business opportunities. It's not unheard of, though, for companies to submit such filings as a way of obscuring their identity and making them harder to find.

BBG has been targeted with several lawsuits alleging that the company deliberately keeps its rates hidden from pay phone users and misleads people into making expensive calls.

One suit filed in U.S. District Court in San Diego in November 2010 alleges that "BBG rakes in millions of dollars in profits as a result of this practice, as they handle over 350,000 pay phones … and process 300 million minutes of calls per month."

The lawsuit goes on to allege that if people call to complain about their charges, BBG employees are instructed to "obfuscate who is the responsible company" and to advise that the matter be taken up instead with one of BBG's various aliases, such as Faircall or Yak Communications.

Those companies, of course, don't actually exist. They're just BBG by another name.

No one at Pacific Telemanagement Services was available to comment on BBG's billing practices.

A spokeswoman for the California Public Utilities Commission said the mile-high charge for Kizner's use of an airport pay phone was likely due to her having required operator assistance.

But Kizner told me the call was entirely automated. She said that after she swiped her credit card, the phone gave her a series of prompts to punch in her expiration date, ZIP Code and security code.

"At no time was there a person involved or any indication of what the price may be," Kizner said.

Nancy Castles, a spokeswoman for LAX, said airport officials were surprised to learn how easy it is for people to end up paying nearly 20 bucks for a 20-second pay phone call.

She said that when she and others investigated the situation following my inquiries, they discovered that there are indeed signs warning that credit-card calls can cost at least $10, but those signs aren't placed at every phone.

Castles also said that callers can press a button while dialing to find out rates, but acknowledged that not everyone would think to do this, especially when it's prominently posted that local calls (using coins) cost just 50 cents.

As a result, she said the airport will now require that Pacific Telemanagement Services post additional notices about the cost of credit-card calls. Castles also said the company will be asked to change its system so that rates are automatically disclosed on the phone before a call goes through.

"We feel there's definitely a need for more disclosure," she said.

A big tip of the pilot's cap to LAX for stepping up to address a problem. But it shouldn't be up to individual sites to police pay phone use. Clear disclosure of rates should be standard operating procedure at all California pay phones.

That's a fairly easy fix for our regulators and lawmakers — if they feel inclined to help out their constituents.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com

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