Phone Firms Told to Give Customers 411
Millions of Americans are getting notices in the mail that aim to clear up one of the murkiest areas of modern telecommunications: long-distance rates.
For the first time, telephone companies must give all consumers a way to find out exactly what they are paying to dial friends and family outside local calling areas. Long-distance carriers also must warn people of rate increases or other changes.
Although millions of Americans sign up for calling plans knowing the specific per-minute or monthly rates, these prices can go up at any time without being reflected on a bill. And consumers may not remember how much their service costs at which times of day.
People who do not choose a calling plan--nearly half of AT&T;’s customers, for example--may have no idea what rates they are paying.
Under changes in federal law taking effect Aug. 1, companies will have to establish a direct contract with their users, similar to the relationship credit card companies have with customers.
Already AT&T;, WorldCom and other major carriers have started sending subscribers agreements that lay out specific terms and conditions of service.
The mailers consumers are receiving now either tell them the rate they are paying or where they can find that information. The companies also are letting subscribers know where to find details of future increases. Customers could look them up on Web sites, check toll-free hotlines, wait for calls from the companies or find notices with their monthly bills, under the options carriers are implementing.
“This change will require long-distance phone companies to abide by the same consumer protection laws as any other company does,” said Dorothy Attwood, the Federal Communication Commission’s top official for phone policies. The move “will go a long way toward giving consumers the information they need to choose a company and plan that’s best for them.”
Until now, a century-old doctrine obligated the nation’s long-distance carriers to tell only the government, not subscribers, when they boosted their rates. These inch-thick, bureaucratic filings are stowed away at the commission. Consumers could look them up, but they would be hard-pressed to make sense of the legal jargon.
The system, a carry-over from the days of the Bell phone monopoly, allowed the government to approve rates to make sure consumers weren’t getting gouged. But once the long-distance market became competitive, the FCC stopped reviewing the filings.
Federal officials say it’s time for companies to communicate directly with the people who pay the bills, just like other unregulated industries.
Customers of WorldCom’s MCI long-distance service are finding in their mailbox a 31-page booklet that details the company’s policies, including a promise to tell subscribers 15 days in advance of rate changes.
AT&T;, the nation’s largest long-distance business with 60 million customers, says customers are most likely to find out about coming price increases through notices with their monthly statements. The company also has set up a toll-free number with a recording that will be updated on the 1st and 15th of each month with new rate information.
“Keeping customers informed and communicating with them is in our DNA,” said Mark Siegel of AT&T.;
It’s up to state regulators to determine if long-distance companies are doing enough. Officials will be looking at whether consumers are given all the terms and conditions and reasonable notice of any changes, said Deborah Hagan, chief of the consumer fraud bureau in the Illinois attorney general’s office.
Carriers also now will be subject to regular contract law, but major companies are taking steps to avoid litigation. In their service agreements, AT&T;, WorldCom and others are including clauses that require most disputes to be resolved through a third-party arbitrator, limiting the ability of consumers to sue.
“It’s unclear how difficult it will be for consumers to resolve disputes about charges they thought were unfair,” said Gene Kimmelman of Consumers Union. “The theoretical benefits of the change may be vastly diminished by these binding arbitration clauses.”
Consumers won’t have to do much: As long as they pay their bills, they indicate that they agree to the terms and conditions. But most would benefit from scrutinizing their service agreements and figuring out how much they are paying, Hagan said.
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Communicating Change
Steps the top four long-distance carriers are taking to comply with the change in federal law and let customers know about their rates and plans:
AT&T;: Consumers are getting general question-and-answer information in the mail now. Specific details about their plans will become available no later than Monday on the company’s Web site or this toll free number: (888) 288-4099. Starting Aug. 1, this same number will carry a recording to let consumers check for changes or increases to their particular calling plan. Similar information also will be available on the Web and sent to consumers with their monthly bills. The company, like others, also has detailed information on how consumers will be allowed to challenge charges on their bills. Under the agreement, disputes that can’t be resolved informally will be taken to a third-party independent arbitrator instead of a case handled by a jury.
Site: www.att.com/serviceguide/home
MCI WorldCom: The company has started sending out service agreements that include how much basic rate consumers pay per minute, as well as the charges for calling cards, operator and directory assistance, and some of the government-regulated fees consumers see on their phone bills. Consumers on an optional calling plan--such as one in which consumers pay 5 cents a minute for all calls with a $10 monthly fee--have to consult the Web site or call the company at (800) 444-3333 for a separate brochure to get their prices. The packet explains other company policies, including how WorldCom uses information about consumers to market products. The company plans to let its customers know about rate changes 15 days in advance via written notification, and may additionally inform them through a message left at home or by e-mail.
Site: www.mci.com/service
Sprint: The company has sent postcards to its subscribers, giving them the Web site where they will be able to access information about rates and conditions of service starting Aug. 1. Company officials expect that other methods also will be used to notify consumers of price changes.
Site: www.sprint.com/ratesandconditions
Qwest Communications: A brochure that is being sent out by the company explains that changes to long-distance plans will be posted 15 days in advance on the company Web site, beginning July 31. It also will be available to consumers by a recording at (866) 467-5635. Qwest says it may opt to supplement this information with other notices, including newspaper advertisements. Rate information will be posted after July 31; to access, click on “Rates and Service Sc1751475317 Site: www.qwest.com/customerService
Source: Associated Press
