SCAM WATCH
Watch Out for New 1-800 Number Scam - An old scam may be cropping up again for consumers with personal 1-800 numbers. Most long distance companies charge subscribers a per-call fee for calls placed from a payphone to a residential 1-800 number. This fee is then sent back to the owner of the payphone. While this arrangement is perfectly legitimate, in 2002, scammers in Berkeley, California found a way to take advantage of the system. They set up a phony payphone company and connect a bank of payphones to an automatic dialer. The dialer then randomly dialed 1-800 numbers until it hit a residential toll-free number. When the call is picked up, the scammer pocketed the 24ยข fee. Thanks to the auto-dialer, they could quickly rack up profits from the scam. By the time the operation was shut down by police, they had netted almost a half million dollars. Reports of a similar scam are coming in and consumers with residential 800 numbers are urged to check their April and May long distance bills for mysterious one-minute phone calls from Denver, Colorado. If you find such a call, be sure to contact your phone company. For more information on this scam, click herei. (Thanks to ConsumerWorld.org for this tip.)
WIRELESS WATCH
Everything You Ever Wanted to Know About MVNOs But Were Afraid to Ask - One of the fastest growing segments of the wireless market in the U.S. has been so-called mobile virtual network operators (MVNOs for short), especially in the prepaid market segment. According to a recent study, 4 out of every 5 prepaid phone customers will be a MVNO subscriber by the end of 2009. Just what is an MVNO anyway, you ask? MVNOs are wireless phone companies that usually do not own their own network infrastructure and instead buy wholesale minutes from one of the 5 major national wireless companies. They then resell the minutes to their own prepaid customers. The business model gained popularity on European GSM networks but is rapidly gaining subscribers on this side of the Atlantic. Some popular U.S. MVNOs include TracFone (which uses Verizon Wireless and Cingular’s networks), Boost Mobile (using Nextel’s network), and Virgin MobileUSA (reselling Sprint PCS’s network). These smaller companies usually target a specific market niche such as teens or low-income users. The advantages of MVNOs are the same as with most prepaid calling plans. Users are generally not locked in to a contract, their minutes can be replenished automatically via credit card or debit card, and handsets are designed to be as much fashion accessories as communication devices (especially true for Boost and Virgin). The downside of MVNOs is that the cost of using the phones is more expensive, on a per-minute basis, than a typical postpaid wireless plan where you pay your bill at the end of the month instead of pre-paying. For this reason, prepaid MVNO plans are not generally well suited to power users who spend a lot of time on the phone. Last year, TRAC surveyed some of the most popular prepaid phone plans available. Look for an updated survey soon. Click hereii to read the 2004 survey.
TRAC AND YOU
Readers Respond With VoIP Concerns - Last week, we asked TRACNotes readers to send us their thoughts on switching to VoIP. A number of your responded and many people had similar concerns. Here’s what one reader in the Washington, DC area had to say:
“Three things have kept me from trying VoIP: 1) Lack of 911 access; 2) Dependence on power; and 3) Dependence on reliable broadband service.
Candidly I see dial tone as a safety issue. I have relatives and friends with small children in and out of my house. The thought that one might be visiting and not be able to reach emergency services because of funky dialing required scares me.
After the experiences in the last couple of years, moving to dial tone that doesn't require power gives me pause. During Hurricane Isabel dial tone was our lifeline for days while we waited for electric service to be restored.
Finally, I'm served by Adelphia. I telecommute and suffer from random, unexplained outages. While it's annoying and inconvenient for telecommuting, it would be unbearable for dial tone. If I'd grown up in Europe where dial tone hasn't been such a constant dependable part of the culture, I may not see this as an issue, but I didn't and dial tone is a lifeline.
Some say 'Well you have your wireless.' Well not at my home. Wireless service is spotty at best where I live-- within 35 miles of the nation's capital.”
Well said! Thanks so much for writing in. Many consumers continue to be reticent about making the switch to VoIP for just these kinds of everyday reasons. Before the telecommunications industry expects consumers to switch to VoIP en masse, these issues need to be addressed. The FCC will be examining VoIP issues in depth over the next 12 months. We here at TRACNotes will keep you updated as events develop.
INTERESTING LINKS
FCC Main Page: http://www.fcc.gov
FCC Complaint Form - http://svartifoss2.fcc.gov/cib/fcc475.cfm
List of State Regulatory Commissions: http://www.naruc.org/displaycommon.cfm?an=15
What do you think? Got a tip you want to share? Nominate your "Scam of the Week" and your "Tip of the Week" - If we select your submission, we'll give you a one-year free membership in TRAC and acknowledge your contribution by name in TRACNotes. Send an e-mail to trac@trac.org to submit your ideas!
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©2004 Telecommunications Research and Action Center. TRAC grants unlimited rights to reproduce TRACNotes or any information contained in it provided attribution is given as follows: "Source: Telecommunications Research and Action Center. http://www.trac.org"
Endnotes
