One Consumer Bill Is Trimmed With an Ax; Others Hang On

It used to be that death and taxes were considered the two certainties in life. But once telephones took hold, a third unavoidable plague quickly emerged: telemarketers.

Certainly, the industry employs millions of Americans and often benefits charitable causes and legitimate businesses. But the irritation factor is so high that legislators nonetheless occasionally try to protect consumers from the unwelcome--and incessant--phone pitches.

To their credit, a few California lawmakers have recently pushed a larger-than-usual smattering of consumer-friendly telephone bills--including one aimed squarely at telemarketers.

But as cynics know, what’s good for “the people” is not always good for “the industry,” and that means that few consumer bills make it into law unless the industries involved want to play along.


In its original form, the so-called Telephone Consumer Privacy Rights Act of 1998 (AB 2134) called for the creation of a statewide “do not call” list made up of the telephone numbers of consumers who do not want to receive telemarketing calls. The bill would have prohibited telemarketers from calling numbers on the list, imposing civil and criminal penalties for each violation.

Current federal laws are largely ineffective at reducing unwanted calls, because the burden is on the consumer to ask each telemarketer to be placed on a do-not-call list.

Unfortunately for those of us with telephones, telemarketing has avid backers, and they don’t look kindly on restrictions. So on June 22, lawmakers gutted the bill.

The measure, introduced by Assemblywoman Martha M. Escutia (D-Bell), and backed by consumer groups, is still standing, but just barely. The remaining provisions require phone companies to advise customers annually about state and federal privacy rights laws through billing inserts and pages in phone books.


In addition, the bill fixes a loophole in current law that forces consumers defrauded by telemarketers to file any lawsuit against the company in that company’s home county--but only if the consumer made the initial call, say, in response to an advertisement. Escutia’s bill would allow consumers to file suit in their home region regardless of who initiated the contact.

“The bill was heavily, heavily lobbied against by the telemarketers, and we were forced to strip the bill,” said Dan Pone, counsel for the Assembly Judiciary Committee, which is chaired by Escutia. “We still think it’s an important first step, and we’ll be back next year.”


A few other bills are having better luck so far this session in Sacramento. Assemblywoman Diane Martinez (D-Monterey Park) has introduced one of two bills aimed at thwarting the telecommunications fraud known as “slamming,” which happens when a customer gets switched to another long-distance carrier without being asked.


At least two other bills target slamming’s twin scourge, “cramming,” which happens when a customer’s phone bill contains fraudulent--and often unnoticed-- charges. Another tries to rein in the fraud associated with some prepaid calling cards.

In addition, there are a few bills under consideration that are especially tailored to counter the activities of Pacific Bell, a strong lobbyist and the state’s largest phone company.

Senate Bill SB 1161, for example, was introduced by Sen. Steve Peace (D-El Cajon) to counter growing uneasiness over PacBell’s approach to caller ID, the controversial add-on service that allows subscribers to see an incoming caller’s phone number on a special display.

Since its introduction, caller ID has been dogged by privacy concerns. More than half of California’s phone users asked to have their phone numbers blocked from caller ID displays on every call. PacBell recognizes that when so many people block their numbers, the value of the caller ID service is reduced. So the company’s sales representatives have begun a campaign to talk customers into switching to less-protective blocking options.


The move has enraged consumer groups, even the consumer group within the state’s Public Utilities Commission.

Peace’s bill underscores the phone company’s duty to fully explain all blocking options to customers, not just the one they want the consumer to pick. The current version, however, would apply only to new customers.

Another Peace bill, SB 1070, was introduced after PacBell said it planned to make telemarketing calls to its unlisted customers to let them know about new phone services. The plan created a furor in California, where close to half of all residents pay to have unlisted or unpublished phone numbers.

Chastened by the criticism and Peace’s bill outlawing the practice, PacBell withdrew the proposal.


“We were able to send a message that it’s not OK to use your proprietary unlisted phone numbers for marketing calls,” said Randy Chinn, Peace’s telecommunications consultant. Chinn said the bill will be amended to prohibit businesses from using a new service called “anonymous call rejection"--which allows a subscriber to turn away all incoming calls that don’t include the phone number for display on caller ID boxes.

PacBell just won approval to begin offering anonymous call rejection. GTE Corp., the state’s second-largest phone company, already offers the service.

“There has been increased interest in telecommunications consumer protection issues because the members have become more sensitive to some of the problems in the industry,” Chinn said. “My feeling is that these bills are going to keep going because the votes behind them are strong.”

Still, Sacramento watchers at the Utility Consumers’ Action Network, a San Diego-based consumer group, are skeptical.


“I see a couple of people trying to make incremental improvements, and those bills have a hard time getting out of committee, let alone passed,” said Charles Carbone, UCAN’s telecommunications analyst. “When the industry has to kill a bill, it will.”


These days, nearly everyone with an Internet account has received at least one copy of an e-mail warning of an evil telephone scam that goes like this: A person calls and identifies himself/herself as an AT&T; technician “checking the line for trouble” and asks you to dial 9-0-# and hang up.

The person then has free use of your phone line and makes expensive long-distance calls that send your phone bill through the roof.


No, this is not one of those infamous urban myths--it can happen. The good news is that it cannot happen to residential customers unless you have a fancy, office-style phone system that requires you to dial 9 to get an outside line.

According to AT&T;, the scam has been around for a few years but happens only rarely.

“Some companies and some government agencies have been victimized, but not to the extent that it appears on the Internet,” said Kathleen Oram, an AT&T; spokeswoman. “And I think some people have gotten calls like that at home, but that is probably by someone who read about it and is playing around, because it won’t work on a residential line.”



It works like this: The scammer calls the main number of a business that has an internal phone system, such as a private branch exchange (PBX), and cons the operator into pressing 9-0-#. Those codes give the caller a new dial tone, allowing the scammer to make calls on the business’ nickel. Smart cons also know how to terminate one call without losing the dial tone, making it possible to make multiple calls back to back.

But the scammers are not likely to be prison inmates, as the Internet legend has it. Most inmates are allowed to make only collect calls.

AT&T; says its technicians would never ask an operator to dial special codes to check a line. Still, the company has gotten so many calls about the ruse that it has put information about it on its Web site (