There is an actual pay telephone in The Plaza at Prince Georges Shopping Center on East-West Highway in Hyattsville MD. It's roughly across the street from the Prince Georges Plaza subway station on the Metrorail Green Line. It specifically states it does not permit incoming calls, but that's okay, lots of other pay phones don't either. By using one of the tools of the trade, I discovered its phone number: 301-853-8103.
It's a COCOT, i.e. it's not a Verizon pay telephone. Now, if you were actually going to use it to dial a number and pay in cash, its rates are very reasonable, 50c for a local call of 10-minutes or less (Verizon charges 50c for local calls but puts no time limit on them.) $1.00 will get you a 10-minute call anywhere in the country that's not local.
Now, the phone states that for collect calls its rates are 50% of AT&T. And this is where the fun comes in. And the fraud. To be sure I got it right I wrote all prices quoted to me down.
I don't really have a place I can call collect to check it out, but I can check the credit card rate since that's probably going to be similar, since they have to pay a processor for the charge. I personally can process any credit cards that someone wants to pay me through Google Payments, they charge me 3 1/2% plus 35c and no monthly fee, so for anything up to $10, call it 50c. (Large scale billers would get even better rates.)
So let's say that they also have to pay the mall something on the credit card surcharge so let's add another quarter, and let's say they'd have to add something to ding you for the convenience, so let's up it another quarter, so presumably a credit card or collect call would run like $2 for 10 minutes, or maybe they ding you further and charge $2 for 5 minutes, I doubt the charge the phone company would make for processing a collect call could be much more than a credit card processor.
So I try calling a local call, but it really shouldn't matter where I'm calling because rates have been postalized; you either pay about $20 a month for a phone line and 5c a minute for non-local calls or you pay about $40 a month and nothing for calls anywhere in the U.S. and Canada. Even less if you put in a VOIP box and route calls over that.
To be sure it's a local number I try itself. I dial 0+301-853-8103. The automated attendant asks me if I want to call collect, credit card, speak to an operator or get the rate for the call. I press 4 to get the rate. It asks me whether I'm calling collect or credit card. I try credit card.
The price of the call for the first 3 minutes is: $23.93 and extra time is $3.45 for each additional minute. For $23 I can walk into a7-11 and buy a cheap Net-10 or TracFone cell phone and get about $12 change; they will charge $10 plus tax whether I buy it with cash or a credit card, and for that $10 I get a charger, initialization of the phone and a phone number assignment, and the first 20 minutes of talk time, incoming or outgoing. All I need to do is plug the phone in somewhere for a while to get the battery going. And I have 60 days to use the 20 minutes before the phone becomes inactive; I'd have to buy more time if I wanted to keep it running.
Well, they also announce another service on that phone, 1-866-866- CALL, who, when I get through to their operator, she can't look up calling the phone's own number billed to a credit card, so I give her my cell phone number 703-225-xxxx which although it's in Virginia it is still a local call. That will cost $14 for the first 3 minutes.
Then I tried 1-800-CALL-ATT, which is AT&T's old dial-through service. Someone else is running it but they use AT&T's network, they say. For a credit-card billed call they will charge $12.75 for the first three minutes and $1.75 for each additional minute.
Note, these would be automated calls, not using an operator.
Well, I remembered the way you dial an actual number over a network,10-10-288 which would use the AT&T network. So I tried 101028803018538103. I get a bong and the AT&T name, so I've actually gotten AT&T. It asks me whether I want to use a credit card or collect. But there's no way to find out the rate, but I can speak to an operator. Apparently the phone isn't passing the number and when I gave the AT&T operator the phone's own number for a credit-card billed call it didn't like that, so I gave him my cell phone number.
The AT&T Rate for a credit-card billed, user-dialed (local) number is: $6.80 for the first one minute, $1.84 each additional minute, plus tax, making a 3-minute local call on AT&T cost $10.48. (It's probably the same for any number called but this is an example.)
Now, gouging people is one thing, it's a ridiculously high rate, but if you put out a service, you can charge anything you want. However, what you can't do is make a provably false statement in doing so, that is clear fraud.
In my original example, charging a credit card user a surcharge for what the credit card company is charging plus the regular cash rate, and even if they charged 100% more and charged $1 for 5 minutes, would have made a 5-minute call $2 and even if they charged a $2 surcharge instead of $1, at $3 for 5 minutes, or even if they charged $1 a minute plus a $2 surcharge would have made their rate honest at 1/2 of AT&T's rate.
But it's not. Their rate is not 50% of AT&T's rate, their rate is250% of AT&T's rate. And that is fraud because the statement on the phone is provably false.
If they didn't claim their rates are cheaper and then charged the ridiculous rate of $23 for 3 minutes and $3.45 each minute after I'd say they were gouging people - they are - but if they want to do that, as long as you can find out their rate in advance it's not an issue. But if you found out AT&T's rate, then took them at their word that their rate is 50% of AT&T, you'd be expecting to be charged $3.40 for the first minute. Even if they didn't discount the additional minutes and charged the same, $1.84, it wouldn't be that bad but technically otherwise it should be 95c a minute, not $3.45. There would still be a lot of profit there at $3.40/95c. At these rates it would be 1/2 of AT&T; it's honest even if still ridiculously high but still acceptable.
But intentionally defrauding customers is not.+--------------------------------------------------------------+ Paul Robinson (My Blog) "The lessons of history teach us - if they teach us anything - that no one learns the lessons that history teaches us."