This post deals with a fictitious telecommunications company (Appalachian Bell) and its policy of acting as a billing service for 900 numbers.
900 number services is an industry well-regulated by the Federal Trade Commission (FTC). The regulations imposed by the FTC have implications for both public and private law. A company providing these services has certain responsibilities, as does a company that handles billing for the services. Any company involved in this industry should be aware of the legal implications of the service and implement policies to avoid future disputes.
The public law implications of issues relating to 900 numbers mainly relates to the regulations imposed by the FTC on 900 number services. The FTC requires all advertisements for 900 number services to include a disclosure of any rates applicable to the call. The FTC is quite specific about what charges must be disclosed and how they must be disclosed. Additionally, if the cost of the phone call exceeds $2, the service must introduce the call with a disclosure of the rates and any requirements for parental permission. The caller cannot be charged for this introductory message. Finally, 900 number services are prohibited from advertising toward children unless the service is educational. If that is the case, the service must require parental consent (Federal Trade Commission, 1996).
The interaction between 900 number services and consumers is guided by private law. The FTC sets requirements on the billing of consumers. For example, calls to 900 number services must be clearly delineated on the the phone bill. Additionally, the bill must provide a means for dispute resolution via a toll-free or local phone number. The consumer has 60 days after the bill is received to dispute the charges, and the billing company cannot try to collect on the charges until the dispute is resolved. After a dispute has been filed, the billing company has 90 days to resolve the dispute (FTC, 1996).
The rules and regulations in this situation are quite clear. Now that the Kettle family has raised a dispute, Appalachian Bell has 90 days to resolve it. The first order of business is to launch an investigation into the 900 number service provider and ensure that the regulations set forth by the FTC were clearly adhered to. If the Kettles’ 12 year old grandson was warned that children under 18 needed parental consent and he chose to lie about his age, then the Kettles will be responsible for the phone charges. At that time, the dispute will be resolved and Appalachian Bell will be free to pursue collections.
Appalachian Bell should work to avoid future problems in relation to 900 number services. Although the practice of obscuring the billing party may be useful for consumers wishing to hide their own activities from family members, it provides little benefit to Appalachian Bell. In fact, consumers are more likely to dispute charges when the billing party is not readily evident. In the future, Appalachian Bell should include the billing party’s name along with the other required information.
Appalachian Bell also has the ability to block outbound 900 numbers. Although this service might cost a small fee, Appalachian Bell should make it known to customers that such a service exists. Many customers will be glad to pay the extra fee for peace of mind. Additionally, Appalachian Bell may be interested in instituting a one-time charge forgiveness for long time customers that incur a sudden charge. Often these charges are mistakes made by children, and Appalachian Bell’s understanding in these matters will go a long way with the community.
Federal Trade Commission. (1996). 900 numbers: FTC rule helps consumers. Retrieved October 17. 2008.
Ferrell, O. C., Freadrich, J., & Ferrell, L.. (2008). Business ethics: Ethical decision making and cases (7th ed.). Boston: Houghton Mifflin.