Michael Murphy received a postcard saying he qualified for credit card. All he had to do was dial a 900 number, the advertisement said.
The East Baltimore man picked up the phone, not knowing he was being victimized by one of the schemes that consumer advocates say have invaded the 900 industry, in which phone companies act as billing agents for other companies providing information services.
Murphy dialed the number, and a recording told him to call another number for further information.
When he did, another recording instructed him to punch in a code listed on the postcard. Murphy tried -- and tried -- and each time the computer cut him off. Murphy wound up dialing the 900 number six times before giving up.
What Murphy didn't know was that every time he dialed the 900 number, a $29.95 charge was being added to his phone bill. And he didn't find out until his C&P; Telephone bill arrived. It showed he owed $187.50, including $7.80 for the initial call, in charges billed by US Sprint.
"It was quite a surprise," he says. "Surprises like that you don't want, especially when you come home at 5 o'clock."
His story had a happy ending: C&P; Telephone removed the charge after he complained, and his long-distance company, US Sprint, eventually closed its lines to the purveyor of credit cards.
But other callers are spending millions on 900-number ripoffs, consumer advocates say.
"The 900 pay-per-call service has emerged as one of the most significant vehicles for consumer fraud in recent history," says a recent report by attorneys general from nine states. As the industry has grown, so has the number of "false, misleading, deceptive or otherwise illegal 900 promotions and programs."
"All that a deceptive information-provider has to do is induce the consumer to dial a 900 number and the charge automatically applies," the report points out. "The fact that charges are billed by the telephone company adds legitimacy and muscle to the bargain."
Problems with 900 calls are one of the top two areas of complaints to the Federal Communications Commission, says Mary Beth Richards, an enforcement official with the FCC.
And the Maryland attorney general's office has been receiving an increasing number of gripes from people citing "outrageous" 900 practices, says Rebecca Bowman, head of the complaint unit in the Consumer Protection Division.
People's main complaints, Bowman says, are that they didn't get enough information at the time they placed the call, or they didn't get what they expected for their money.
"A lot of what people get is what they could get from other sources for free," Bowman says. In some cases, such as Murphy's, consumers have to make a string of 900 calls, racking up a charge with each one, with dubious results.
Industry spokesmen say that most 900-number companies -- known in the trade as information providers -- are legitimate, providing consumers with everything from stock-market reports to used-car prices to computer trouble-shooting to legal advice. There's even a 900 number for people interested in getting into the 900 business.
But consumer advocates say the industry is so new and growing so fast that the lack of regulation has allowed too many shady operators to amass huge profits while providing little or nothing of value.
The report by the nine attorneys general says credit card and loan offers, often aimed at people who can't get credit, lead the list of consumer complaints.
Postcard solicitations or TV commercials saying "bad credit -- no problem!" are pitched to consumers who then have to call a 900 number, or a series of 900 numbers that rack up more phone charges.
In one case, a Baltimore man called a 900 number after a TV commercial promised a bonus of $100 to anyone who had been %% rejected for a credit card. He ended up with a $38 charge on his phone bill -- and never got the credit card or the $100.
Sometimes consumers get no more than a list of banks that offer secured cards, which require a deposit equal to the credit limit. Sometimes they get a catalog card, good only for merchandise sold through the company's catalog at inflated prices. Sometimes they get nothing.
Other solicitations target credit-worthy customers with offers of low-rate credit cards. In these cases, the consumer usually gets no card but only a list of banks that offer them, meaning the consumer must apply for one like anyone else.
As for loan offers, callers often get nothing more than lists of lenders. Or the caller is told that a fee must be paid in advance, as a Dundalk woman recently discovered.
An out-of-state outfit promised her a loan if she paid a $250 "processing fee." She did, but her loan was "delayed," and she could get no further information because the 900 number kept cutting her off.
The Maryland Office of Consumer Credit did manage to get her $250 refunded, but she was still out the 900 charges.
Sweepstakes, games and contests are another source of many complaints, says the report by the attorneys general.
Direct-marketing companies send prize notices to consumers telling them to call a 900 number to find out what they have won. Often these are tied to a sales solicitation, with the prize being a voucher or coupon good for over-priced merchandise sold through the marketer's catalog.
If the call is being billed on a per-minute basis, chances are the promotion will be long-winded. The bottom line is that consumers end up paying to hear a deceptive sales promotion.
Many trivia contests and games have tricky and hidden rules to disqualify those who successfully play the game. Or there are several rounds, each involving a 900 call; initial questions are easy, but the final one is impossible.
The report by the attorneys general also says that vacation offers produce many consumer complaints.
To claim a "free" vacation, people have to call a 900 number -- and are charged for the call. Moreover, only part of the vacation package is free, and the remaining costs may be inflated.
Room charges might be waived for a few nights, but the consumer is required to stay additional nights at a certain hotel, and also must pay transportation and other expenses.
Another source of 900-number gripes: job-line services advertised in the classified columns of newspapers. These ads sound like regular help-wanted notices but list a 900 number. Or some list a regular number but then refer callers to a 900 number.
The most frequent complaints: The jobs described don't exist; the information provided is not worth paying for -- names and phone numbers of personnel offices, for example; and the messages are padded with generalities such as grooming tips.
This spring, for the first time, the Federal Trade Commission moved against a job-line company for allegedly bilking callers. TransWorld Courier Services of Georgia agreed to pay $1 million that the FTC will refund to consumers.
A half-page ad by TransWorld in C&P;'s Baltimore Yellow Pages lists the 900 number in large type. But fees are not spelled out, and consumers must call an 800 toll-free number to find out the cost of the 900 call.
According to federal regulators, many deceptive 900 services also fail to fully disclose fees in their advertising, or the actual fees differ from the ones listed. Or ads give a per-minute rate but do not reveal how long the call really takes.
Calls based on a per-minute charge often are hard to hear and may disconnect prematurely, forcing the consumer to call back several times to get the information.
Federal regulators also have received complaints about collect 900 calls, made by computerized dialing equipment. Charges mount up if the consumer misses the instructions on how to cancel the call.
On many TV spots for 900 services, fee information is mentioned hurriedly at the end and is barely audible. Sometimes the price is flashed so quickly and in such small type that it can't be read.
Advertisements for 900 services even show up on children's television programs. And some of these commercials are pitched at youngsters who don't know how to dial.
On a program in Seattle, a commercial told small children to hold the phone up to the TV, then reproduced the tones needed to make the 900 call.
, NEXT: Big money, no regulation
Where to complain
If you're dissatisfied with the services provided through a 900 number or the charges, you can call C&P; Telephone to complain and to find out which long-distance carrier handled the program.
The long-distance companies -- AT&T;, MCI, Sprint and Telesphere -- advise consumers to first call C&P; customer service. (That number varies; call 411 or check the C&P; customer guide in the front portion of your phone book, or the C&P; listings.) If you still have a problem, call the long-distance carrier. The carrier also can tell you how to reach the 900 company. Here are the long-distance carriers' toll-free numbers:
* AT&T;: 1-800-222-0300
* MCI: 1-800-444-3333
* Sprint: 1-800-366-0707
* Telesphere: 1-800-346-6329
You also can file complaints with the following government agencies:
* Consumer Protection Division, Maryland Attorney General's Office, 200 St. Paul Place, Baltimore, Md. 21202, or call 576-6550.
* Federal Communications Commission, Common Carrier Bureau, Enforcement Division, 1919 M St. N.W., Washington, D.C. 20554.
* Federal Trade Commission, Division of Marketing Practices, Sixth Street and Pennsylvania Ave N.W., Washington D.C. 20580.