Date: Fri, 24 Apr 92 19:01:13 CDT From: Jim Thomas Subject: File 1--COCOT Scam or Simple Exploitation? Telephones and long distance service are crucial to modemers, and most of us have become accustomed to the abuses of providers, especially COCOTS and smaller long distance carriers. COCOTs, Customer-Owned Coin-Operated telephones, are bad enough when they rip-off the general public, but when they exploit a captive population, they can be unethical, perhaps illegal. The scenario of one example of COCOT abuse and a high-rate long distance carrier illustrate the problem. A caller (C), recently released from a federal prison, was sent to the Salvation Army Freedom Center (SAFC) (a community corrections center at 105 S. Ashland in Chicago) to serve out the final months of his sentence. He made two collect calls to a friend (JT) on March 24 (10.20 pm) and March 31 (9.29 pm). Believing these were routine calls, JT accepted them. The two calls were for $10.40 (for 20 minutes) and $5.23 (for five minutes). Neither charge includes taxes. The phone at the SAFC is a COCOT, and the long distance carrier is U.S. Long Distance. When prisoners are released from the custody of a prison to a community center, they normally immediately call their family and close friends to assure them they are fine and to provide a new address and other information. Released prisoners are generally not likely to have long distance credit cards or to be consumer-literate on the nuances of long distance billing. Newly released prisoners rarely have sufficient financial resources, and in Illinois, most come from low-income backgrounds. Consequently, excessive phone costs are being imposed on those least-able to afford it. The SAFC is taking advantage of the importance of communication with the outside and with the lack of consumer literacy to exploit ex-offenders and their families. Their stated purpose to "help" prisoners is not served by these excessive rates of which the SAFC receives a substantial flat-rate portion and perhaps an additional percentage. Whatever the ethics of the SAFC COCOT, it seems aided by apparently deceptive practices of the long distance company, USLD, which may be illegal. JT received his March telephone bill from GTE, his local carrier. He noticed that the charges were billed by Zeroplus dialing, a billing agent that handles calls for a number of long distance carriers. He called his local GTE representatives to complain, and was told by two supervisors that GTE could do nothing, that they only collected the fees *for* other carriers, and that consumers should be consumer literate and be aware of who the long distance carrier is *before* accepting a call. They indicated that customers should also inquire about the toll charges before accepting. Even when raising the issue of possible fraud, GTE personal were indifferent. Although acknowledging that they received "many" complaints, they emphasized that it was the consumers' responsibility to educate themselves. JT obtained the number for USLD's customer service, which turned out also to be Zeroplus Dialing. So, he called Zeroplus to further investigate the charges. Zeroplus indicated that they, too, were merely a billing agent (as well as customer service representatives), and that the carrier was U.S. Long Distance (USLD) out of San Antonio, Texas. They indicated that they were powerless to adjust a billing and suggested calling USLD directly. They also indicated that GTE was able to adjust billings. GTE vehemently denied this, but a return call to Zeroplus prompted two supervisors to check, and they indicated that, according to their contract, GTE personnel were mistaken. (Another call to GTE to ask for an explanation in the discrepancy between the claims led to another denial. A call to USLD was initially less than satisfactory. A representative there indicated that they had nothing to do with the billing. They only set the rates, and JT must take billing problems up with Zeroplus. JT again called Zeroplus, who indicated that USLD's claim was nonsense, and USLD was the only company who could provide information about the bill, the COCOT, and handle the complaint. The information about billing procedures provided by supervisors seems confusing. As near as JT could determine from the conflicting information provided, USLD claimed only to set rates, not involve itself with billing or rate adjustment. Zeroplus Dialing claimed only to process and collect the charges, not adjust billing. GTE claimed only to serve as billing agent, and claimed to have no authority to adjust billing. Each organization referred JT to the others. Neither USLD nor Zeroplus were willing or able to provide information about the identity of the COCOT or the location of the telephone, although GTE was able to identify the location (but not the owner) in about 60 seconds. According to C, the caller, there was no information on the telephone itself identifying it as a COCOT, and the only marker on it was a sticker that indicated a repair number, but no other identifying information. JT's recollection was that when he accepted the calls in March, the long distance operator *did not* identify with a company, but said only: "Long distance operator with a collect call from C. Will you accept it?" This seemed to be a normal inquiry and was sufficiently close to the "AT&T long-distance" format that the call was unquestioned. But, because of time that had elapsed, it was possible that JT's recollection of the March calls was flawed. To be sure, JT arranged for C to call several times in late evening of April 24. C made three collect calls to JT with the following results. The ensuing dialogue was written as it transpired and was heard by both JT and C: Call 1, about 11:30 pm -- The phone rang: JT: Hello? Op1: long distance operator with a collect call from C. Will you accept? JT: Which long distance operator? Op1: This is the long distance operator. JT: I mean, which long distance company are you the long distance operator for? Op1: U.S. Long Distance. JT: How much will accepting the call cost? Op1: What? JT: How much will it cost me to accept these charges? What are your rates? Op1: I don't know. I'll have to connect you to my supervisor. The operator then disconnected, although in talking with his supervisor later, the disconnection seemed a legitimate accident. On disconnect, C immediately called back. Call 2 -- This call came through an automated voice message system in which a pre-recorded male operator's voice announced that a company called "American" had a long distance call from (pause for caller to identify himself). The pre-recorded voice then continued: Dial 5 to reject the call, 0 to accept, otherwise stay on the line. Believing that "stay on the line" meant that a live operator would answer, JT stayed on the line, but the original message repeated several times. Wondering if dialing a 9 would connect to a live operator, JT dialed 9. Whether through inadvertent dialing or through the system's failure to recognize the 9, the call went through as "accepted." Both JT and C immediately disconnected. The GTE supervisors' earlier advice to inquire about LD tolls is rather difficult when it is not possible to speak with an operator. Legal? Apparently. Shady? Deceptively so! On disconnect, C called JT a third and final time. Call 3, about 11:50: JT: Hello? Op2: Long distance operator with a collect call from C. Will you accept the call? JT: Which long distance company are you with? Op2: U.S. Long Distance. JT: How much will the call cost if I accept? Op2: What? JT: What are your rates? Will this be expensive? Op2: I don't know. Just a minute, I'll have to check with my supervisor. (placed on hold for about 15 seconds) Op2: The first eight minutes will be $7.46, and 42 cents for each additional minute. Do you accept the call? JT: What if we only talk for five minutes? Op2: It's a flat rate.....do you accept the call or not? JT: Even for a short call? Op2: (pause) The first minute would be $5.92. Do you accept the call? JT: Just a minute, I'm calculating.... A little over a minute of discussion interspersed with the operator's insistance that JT make a decision on accepting, even though it was made clear that he was calculating, created pressure to accept, so JT asked to speak to a supervisor. The operator said "just a moment," and disconnected him. However, the phone rang about 30 seconds later, and the USLD supervisor was on the line apologizing for both accidental disconnects. The supervisor was helpful and courteous, and not unsympathetic to the situation. She discussed the billing policies and the USLD system for about 20 minutes. However, she indicated that the USLD policy was to indicate immediately that the call was from U.S. Long Distance when the operator connected with the charged party, and seemed concerned that their operators failed to do so. What is to be made of this? 1. USLD's DECEPTION: The failure of multiple operators to immediately identify themselves and their company when connecting with the party called may or may not be intentional, but the result is deceptive. Whatever the stated policy of USLD, there is unequivocal evidence that their operators, either by informal norm or by tacit operator procedures, violate what all supervisors indicated to be a legal requirement to self-identify when connecting with customers. The introductory words ("long distance operator with a collect call from...") are said quickly and are glossed over, and normally the party called doesn't listen with sufficient care to determine that "long distance operator" isn't preceded with a company name. The focus is generally on *who* is making the call, not with the need to pay cautious attention to a quickly-spoken carrier name (or whether the name is spoken at all). Further, the dialogue reveals that the initial words were "Long distance operator" and not "This is the long distance operator," which removes the second or so that listeners require to get their audio bearings that an extra word or two would provide. If AT&T's claim to be *THE* long distance company has merit, then one would normally associate the initial words "long distance operator with a collect call from..." with an established company. Whatever the motivation, USLD's operators seem to employ a deceptive method by which a small long distance carrier that charges exceptionally high rates can confuse and mislead a customer. 2. GTE'S "RESPONSIBILITY:" GTE distanced itself from what it agreed can be abusive practices of those for whom it serves as a billing agent: a) It claimed "nothing can be done" because it's only the billing agent; b) It claimed that abusive policies of others are unfortunate, but not their problem--it's the fault of deregulation (akin to saying people don't rip-off people, opportunities do); c) It "blamed the victim" by saying that it is consumers' responsibility to be consumer-literate. Let's look at this rationale: a) NOTHING CAN BE DONE: If an LD carrier for whom GTE is a billing agent is alleged to engage in deceptive practices in violation of either law or policy, GTE is under no obligation to treat that carrier "neutrally" as GTE personnel claim. If they uncritically accept the responsibility of collecting for any company that repeatedly engages in deceptive practices, then it effectively acts in collusion with the offender. One would hope for a more ethical response from an enterprise such as GTE that claims to be a staunchly reputable company. If they are actually saying they can do nothing in the face of alleged deception other than shrug their shoulders and collect their cut, then they promote deceptive practices. Even a sympathetic "we'll look into it" response would be better than blowing off the complaining customer with a "tough luck kid, ya shoulda knowed better" attitude. b) DEREGULATION'S THE PROBLEM: Telling a ripped-off customer that it's deregulation, not peoples' behaviors, that cause problem is akin to the Secret Service telling BellSouth that the Legion of Doom wasn't guilty of breaking into their computers--it was the computer's weak security that was at fault. Len Rose, Craig Neidorf, and Shadowhawk learned that this line of reasoning has little currency when a teleco alleges victimization. Unethical behaviors are the problem, not deregulation. For GTE to use this excuse to distance themselves from their obligation to assure that they do not promote rip-off by serving as a collection agent for those ripping-off is merely another form of denying both the problem and their obligation to investigate complaints for which there is evidence of deception. Instead of aligning themselves with an ethical position, GTE aligns with the problem. c) THE CUSTOMER SHOULD KNOW BETTER: Should consumers be consumer-literate? Absolutely! Is it possible to be consumer literate in this situation? No way! The problems of collecting information after the problem occured were difficult, and JT still lacks answers to the questions he posed to over a dozen teleco personnel in as many day-time, full-rate long distance calls. Consider just a few of the problems in becoming "consumer literate:" When a long distance carrier is less than forthcoming about its identity when connecting with a collect call, and when it's initial spiel to a customer gives the impression that it is a familiar, common, company rather than one that charges high rates, consumers are put at a disadvantage. When asked about billing costs, operators do not have this information readily available, and one operator (operator 2) gave rates different from those given by a supervisor--the operator gave inaccurate information. Further, when an *automated* system connects with a consumer, there is no opportunity to investigate the rate structure. If there is no obvious way to connect with on-line personnel, it is impossible to self-inform. The multi-tiered billing structure and, in this instance, the initial unwillingness of each company to accept responsiblity for the billing policy creates further difficulties in obtaining information. Queries to operators and supervisors on a number of basic issues led to "I don't know," "We don't have that information," or "we can't give that information out." It is unreasonable to expect the average consumer to be functionally literate when there are so many barriers to obtaining information. Ironically, a GTE supervisor who strongly argued that consumers should familiarize themselves with teleco policies gave out significant erroneous information: JT asked whether there were some higher authority than this supervisor to whom he could appeal in discussing the problem. She claimed unequivocally and absolutely that she was the ultimate arbiter, and there was no one higher. Subsequence calls indicated she was in error. Although she did not intend to deceive and simply coded the question in a limited way (despite multiple rephrasings), she nonetheless misinformed. Her information would lead one to believe that there were no other channels to be pursued at GTE, which would deter most customers from additinal inquiry. Further, either GTE personnel or Zeroplus personnel were in substantial error when identifying GTE's contractual ability to adjust charges. If teleco supervisors and managers cannot sort out fundamental responsibilities, how can consumers be expected to be "consumer literate?" Although the GTE supervisor was otherwise cordial, her error provides a significant example of the distorted information given to consumers even when they try to inform themselves. 3. THE ETHICS OF THE SALVATION ARMY FREEDOM CENTER: The SAFC should be held to account for exploiting those people it ostensibly is contracted to serve. The SAFC reportedly receives a portion of the initial connect charge in two separate categories. One figure was $1.40, and the other $1.75. The USLD personnel providing these figures did not know if they were combined or if the SAFC receives an additional percentage of the toll over the initial connect charge. Whatever the details, the SAFC is being compensated by people who can ill-afford such exorbitant rates. It is not clear whether there are COCOTS for personnel who are not recently released prisoners in the area of the facilities for employees or "civilians." Nor is it known whether coin-operated phones elsewhere in the facilities have carriers with more traditinal rates. SAFC personnel with whom JT spoke claimed to have no knowledge of the telephone policies, who was in charge, who collected the money, or who made the decisions for selecting specific carriers. Whatever the reasons, the SAFC is engaging in a practice that questions both their integrity and their stated purpose of facilitating ex-offenders' return to society. 4. WHAT IS THE CUSTOMER'S RESPONSIBILITY? Judging from this incident, it is impossible for consumers to inform themselves of the nuances of teleco policies. It is not that there are too many separate policies created by deregulation (as GTE personnel and others claimed). Rather, there are too many teleco-created obstacles to obtaining information and too many levels for the intrusion of misinformation, some given intentionally, some inadvertently. In a sad and rather ironic way, the consistent misinformation or deception of telecos partially supports the contention of phreaks and hackers that unauthorized intrusions into industry computers are necessary to help provide information on corporations that seem unaccountable for their actions. The telephone has long been a semi-friendly device that we come to accept as part of everyday life. Most consumers do not expect answering a ringing telephone to be an occasion for potential rip-off by telecos that claim to serve, rather than abuse, us. Unfortunately, given the behavior of those acting on behalf of some telephone companies, the telephone is becoming a potential enemy and instrument of abuse. Rather than serving as an instrument that brings people closer, the actions of telephone abusers, including teleco personnel, are making us more distrustful. WHAT IS TO BE DONE? Readers of Pat Townson's TELECOM DIGEST continually identify teleco abuses and relate how they can be resisted (Telecom Digest is available on usenet). In cases such as this, several responses might be useful. First, those receiving collect calls should question the operator to determine the identity of the carrier if not initially given. Parties should also request a detailed rate structure that includes the cost of the initial connection, the cost-per-minute, and any additional charges. Second, when alleging abuses, filing complaints with appropriate agencies, such as the state's public utilities/commerce commission, is crucial to bring to legislators' attention the problems of COCOTS, questionable carrier practices, and other issues. Third, letters to the telecos involved, legislators, and others also increases the visibility of the problem. Finally, if otherwise legitimate organizations, such as the SAFC, are utilizing carriers or COCOTS that abuse public trust, the matter should be brought to their attention. If they are under contract to another organization, as the SAFC is to the Illinois Department of Corrections, then the contracting organization should also be notified. It also is often possible to involve watchdog or consumer advocacy groups (in Illinois, Citizen's Utility Board and others) to provide suggestions for responding. When telecos challenge the ethics and social competency of hackers, they claim to hold the moral highground and object to what they perceive as predatory behavior when their own ox is gored. When their own practices are challenged, they are far less willing to apply the same standards of behavior to themselves that they expect from others. Like Woody Guthrie said, "Some rob ya with a six-gun, some with a fountain pen."