Table of Contents

• Should you 'dial-around' for long distance savings?
• How much does it cost to use 10-10 calling plans?
• 10-10 plans offer some international call bargains
• Consumer Action joins privacy complaint against Intel
• Interactive privacy site
• CA co-sponsors House bill to protect credit card users
• Can't rob consumers of right to jury trial, says high court
• CA awarded HUD grants
• CA applies settlement toward consumer education
• San Francisco deep sixes ATM fee ban
• New CA publications

10-10 phone rate survey: Should you 'dial-around' for long distance savings?

Can you save money on your phone calls by using 10-10 numbers like the ones promoted by celebrities Tony Danza, John Lithgow and Sugar Ray Leonard?

Given the proliferation of advertising via TV, radio and direct mail for long distance "dial-around" services, many people are asking about the plans.

Consumer Action examined 11 widely advertised 10-10 calling plans and concluded that depending on which carrier and calling plan you currently use, you might save money, especially on international calls. But, no matter what the ads claim, you are not guaranteed to save money just by using a 10-10 number, and it's very possible you might pay more. (See table for information on the various plans.)

Bypassing your carrier

The terms "10-10" and "dial-around" originated with long distance company access codes that you can use to bypass the primary long distance carrier you've chosen for your home hone. Access codes were five digits (10-XXX) until July 1998, when the industry ran out of numbers and started to use 7 digits (10-10-XXX). Most companies use 10-10 as part of their codes, although the second zero can be replaced with any number.

The dial-around companies hit the market with a bang two years ago and now earn about $2 billion annually.

When phone service is established, customers choose a long distance company to carry their calls automatically whenever they dial a long distance number. This is called subscribing to a primary long distance carrier.

To save money, you also can choose a discount calling plan offered by that carrier. If you don't want to use your primary carrier, you can dial around and reach other companies by using their 10-10-XXX codes.

Capitalizing on consumers' ability to bypass their subscribed carrier, the dial-around companies hit the market with a bang two years ago and now earn about $2 billion annually. Nearly one in five Americans has used a dial-around company to make a long distance call in the past year.

What consumers may not know, however, is that many of these companies are owned by the major long distance carriers. Last year, AT&T introduced its Lucky Dog dial-around company with promises that customers would be eligible to win prizes when they used 10-10-345 to place a call. MCI owns 10-10-321 and 10-10-220. Excel gobbled up some small dial-arounds, including Long Distance Wholesale Club (10-10-297) and Dial and Save (10-10-457).

Consumers should exercise caution when using 10-10 access codes, however. If, for instance, you dialed a call using AT&T's access code (10-10-288) rather than the Lucky Dog code (10-10-345), you could be charged the company's most expensive rates. Before using any 10-10 code, ask about the rates in advance by calling the customer service line.

'A hassle to use'

Consumer Action advises consumers to find a good long distance discount calling plan that will save them money, and not to bother with the dial-arounds for interstate calls unless you are sure the 10-10 company charges no monthly fees or per-call minimums.

"These plans can be a hassle to use," said CA's Linda Sherry. "You have to dial seven digits before the number you wish to call, for a total of 18 numbers."

Sherry pointed out that every member of your household and your guests must remember to dial the proper 10-10 code or your primary long distance carrier will handle the call. If you haven't signed up for a discount calling plan with your primary carrier, you could end up paying basic long distance rates-the highest rates of all.

Most 10-10 companies charge one rate for calls between states (interstate calls) and another for calls within the state (intrastate calls). Rates on intra-state calls may be lower or higher than on interstate calls. A few companies do not carry intrastate calls.

Some 10-10 companies market through independent representatives selling to friends or acquaintances or using the Internet. They usually require you to use a 6-digit "project code" in addition to the 7-digit 10-10 access code in order to get the promised rates.

If you forget to use the project code, you may be charged another rate. (None of the plans in CA's survey require this; however, CA found two offered by WorldXChange that do.)

Survey findings

CA surveyed the state-to-state rates charged by 11 dial-around companies during the week of March 1-5, 1999. The information was gathered by staff members, who called the companies' toll-free customer service numbers.

Among surveyed companies, interstate long distance rates ranged from 7¢ per minute anytime (WorldX-Change) to 28¢ per minute* for daytime calls of under 10 minutes' duration (TelecomUSA, owned by MCI-WorldCom). (*In June 99, 10-10-321 (TelecomUSA) changed to flat rate pricing. Interstate calls are always 8¢ per minute on calls that last 10 minutes or longer, and 16¢ per minute on shorter calls.

Three of the companies charge monthly fees of $3.95 (LDI) to $4.95 (Cable & Wireless and WorldX-Change). If you only make one or two calls in a month, the fees make the calls prohibitively expensive.

Two of the plans charge a per-call connection fee or minimum fee: AT&T's Lucky Dog (10¢ per call) and Vartec's New DimeLine (30¢ minimum on each call).

Two plans owned by Excel, and the Qwest plan, do not charge monthly fees or additional charges of any kind.

The 10-10-220 plan, also owned by MCI-WorldCom, charges a flat rate of 99¢ for 20 minutes, regardless if the call lasts one minute or 19 minutes. You are charged 99¢ even if an answering machine picks up the call.

How much does it cost to use 10-10 calling plans?

PLEASE NOTE: This survey is not current, and should be used only as a guide. For up-to-date 10-10 rate information, we suggest that you visit 10-10PhoneRates.com.

10-10 Number/ Carrier	Plan Name	Customer Service	Per Minute Rate (Interstate)	Fees and Extra Costs/ Availability
10-10-345 AT&T	Lucky Dog	800-317-2657	10¢ per minute anytime.	10¢ connection fee.
10-10-566 Cable & Wireless	Call Club	800-486-8686	9¢ per minute anytime.	Monthly fee: $4.95.
10-10-297 Excel		800-787-7887	10¢ per minute anytime.
10-10-457 Excel	Dial & Save	800-787-3333	10¢ per minute daytime.
10-10-799	LDI Call First	888-848-4878	7.9¢ per minute anytime.	Monthly fee: $3.95.
10-10-321 MCI	TelecomUSA	800-777-2321	Calls of 10 minutes or more are 8¢ per minute anytime.	Calls under 10 minutes are 16¢ per minute.
10-10-220 MCI	TelecomUSA	800-777-2321	First 20 minutes, flat rate: 99¢; each additional minute: 9¢.	Minimum charge of 99¢.
10-16-868* PT-1		888-660-5377	7.9¢ per minute anytime.	*Number won't work in certain parts of U.S.
10-10-432 Qwest		877-825-5432	Night/weekend, 9¢ per minute; weekdays (8 a.m.-5 p.m.) 20¢.
10-10-811	Vartec New DimeLine	800-363-2789	10¢ per minute anytime.	30¢ minimum per call.
10-10-502	WorldXChange** Talk Cents	800-569-8700	7¢ per minute anytime. (In Florida dial 10-10-834.)	Monthly fee: $4.95. **Company is not licensed to carry calls within several states

Information current as of March 5, 1999. (10-10-321 and 10-10-220 rates current as of Oct. 20, 1999.)

10-10 plans offer some international call bargains

Many 10-10 plans have low rates for overseas calls. If you call one country on a regular basis, investigate the 10-10 companies' rates by calling customer service. Then compare them to your primary carrier's international discount plan rates. International rates can vary widely.

(Before you call, have the "country code" handy.)

*Calls under 10 minutes are 64¢ per minute; longer calls are 32¢ per minute. ** $1.99 flat rate for 1-10 minutes; 19¢ per minute thereafter.

If you are going to use a 10-10 number that charges a monthly fee, don't forget that the fee will increase the overall cost of your monthly calls.

"Using 10-10s to call internationally can be a bargain if you are careful about monthly fees," said CA's Linda Sherry. "Many of the pre-subscribed international calling plans offered to residential customers by primary carriers have somewhat higher rates and charge a monthly fee."

To sample international rates, CA asked how much the 11 plans charged to call France (country code 33) and found that per-minute rates varied from 13¢-32¢.

However, if a caller used MCI-WorldCom's 10-10-321 to call France and the call lasted 9 minutes or less, the caller would be charged 64¢ per minute. Using MCI-WorldCom's 10-10-220 a caller could end up paying $1.99 (the flat rate charged for a 10-minute call) for a much shorter call if an answering machine or someone other than the intended party received the call.

Consumer Action joins privacy complaint against Intel

Consumer Action has joined the Center for Democracy and Technology, the Privacy Rights Clearinghouse and Private Citizen in a formal request to the Federal Trade Commission (FTC) to investigate and halt the distribution of a new computer chip manufactured by Intel.

The consumer advocates are critical of the device because it contains an identifying serial number that could be used to track computers-and computer users-across the Internet. They charge that the identifier on each chip is a violation of individual privacy and an unfair and deceptive trade practice that violates FTC regulations.

"At its core, the Pentium III identifying serial number establishes a system that supports the widespread tracking and monitoring of individuals' online behavior. It stands to undermine consumers' efforts to control the use of their information," said Jerry Berman, executive director of the Center for Democracy and Technology.

As the largest chip manufacturer in the marketplace, Intel's new chip design could have far-reaching impact on consumers' online privacy. The combination of Intel's market dominance, the lack of knowledge about the privacy implications of the identifying serial number and the inability of individuals to control its use jeopardizes privacy, say privacy advocates.

A security device?

According to Intel, the identifying serial number is an important security device. The company said that software developers could, for example, use the embedded number to identify participants in electronic chat rooms who were acting objectionably or inappropriately.

Ken McEldowney, CA's executive director, responded by saying that not every computer in use today employs the Intel chip. "Intel is attempting to muddy the waters and obscure serious privacy issues with vague promises that the chip will deter Internet stalkers. Yes, consumers need security, but the price shouldn't be their privacy," McEldowney said.

Beth Givens of the Privacy Rights Clearinghouse said, "The Intel Pentium III with a identifying serial number brings us dangerously close to an environment of ubiquitous monitoring a la Orwell's Big Brother."

Deirdre Mulligan of the Center for Democracy and Technology asked if consumers will be required to disclose the identifier as a price of gaining entry to Web sites. "This would fundamentally eliminate the anonymity that the Internet now affords. The serial number has the potential to become the de facto online identification system."

The complaint specifically asks that the FTC:

1. Halt the shipment of Intel Pentium III Processors equipped with a unique identifying serial number.
2. Commence an investigation into the privacy issues posed by the Intel Pentium III identifying serial number.
3. Enjoin computer manufacturers using the chips from shipping computers unless the identifying serial number has been disabled.

Watching your every move

CA and the other groups are concerned that the privacy of individuals on the Internet will be harmed substantially unless the Commission acts quickly. The use of the chip could create an environment in which the computer user's every move is recorded, said McEldowney.

The advocates point to past experiences with unique identifiers such as the Social Security number (SSN). While not designed for use by commercial interests, the SSN is now a fundamental part of multiple organizations' record-keeping systems.

The SSN is used to create detailed profiles of individuals for a number of purposes, some as seemingly benign as direct marketing, others as harmful as surveillance of people's lifestyle and political affiliations.

The widespread availability of personal information, particularly SSNs, has helped spawn the crime of identity theft. Armed with an individual's SSN, name, address, and date of birth, a thief can open up instant credit accounts at retail stores, apply for credit cards and contract for other services. Privacy and consumer advocates fear that a unique identifying serial number on the majority of the computers in the marketplace will be subject to similar abuses.

Intel has already conceded that the identifying serial number poses a risk to privacy. The announcement last year of the identifying serial number was met with immediate opposition from privacy and consumer advocates. Intel addressed privacy concerns by providing software to let consumers control the off/on switch for the identifier and, in response to continued criticism, announced that the program would automatically default to the off position unless specifically switched on by the computer user.

Despite these steps, advocates say that the identifying serial number is still a major threat to individual privacy. At least one computer expert claims to have figured out a procedure to switch on the identifying serial number from a remote location without the computer user's knowledge.

"People are uncomfortable with their increasing lack of control over personal information," said McEldowney. "They say you don't know you had the right to privacy until it's gone. As more people surf the web, it's imperative that we have a fair chance to decide when and how we'll release personal information, how it will be used and how we can opt out if we aren't comfortable with releasing it."

The full text of the FTC complaint letter can be found on CA's web site.

Interactive privacy site

The American Civil Liberties Union (ACLU) has launched a special website to focus pubic attention on the threat to personal privacy through the collection and widespread distribution of personal data.

You can visit the site (http://www.aclu.org/privacy) and try out several interactive elements, including a complaint form for "privacy horror stories" and a tool to show you what can be learned about you when you surf the web.

Historically, personal information was kept at home, on paper. To protect privacy, our founding fathers wrote the Fourth Amendment, which established that your home is protected from government searches except by court order.

While the Fourth Amendment still protects the privacy of our homes, a lot of personal information about us is kept electronically by insurers, employers, banks, etc. According to the ACLU's Ira Glasser, "Although many believe widespread dissemination of our private data is harmless, the ACLU believes that what they do know, can hurt us."

CA co-sponsors House bill to protect credit card users

Late last year, Consumer Action (CA) and the Consumer Federation of America (CFA) released an expanded credit card survey pointing to pervasive anti-consumer practices by the credit card industry. The organizations called on Congress to pass new consumer credit card protections.

On March 2, lawmakers responded with the introduction of a bill to protect consumers from credit card abuses. The bill was authored by Rep. John J. LaFalce (D-NY). CA and CFA are co-sponsors of the legislation, which proposes wide-ranging protections that target teaser rates, late fees, interest rate hikes, student credit and convenience check disclosures.

"We are pleased that Congressman LaFalce has responded so creatively to many of our ongoing concerns about anti-consumer strategies employed by credit card issuers," said CA Executive Director Ken McEldowney. "We are proud to co-sponsor this proposal."

McEldowney pointed out that Consumer Action's 1998 credit card survey helped to focus attention on aggressive new strategies by the banking industry to increase their credit card income and push consumers deeper into debt.

The bill, titled the Consumer Credit Card Protection Amendments of 1999 (HR 900), would:

• Require credit card solicitations to provide full disclosure of permanent interest rates, so that consumers would not be misled by introductory "teaser" rates.
• Ban credit card issuers from canceling an account or imposing new fees on card holders who routinely pay off monthly card balances in full.
• Prohibit credit cards from being issued to people under 21 years old, except with parental approval or evidence of means of payment.
• Require full disclosure in billing statements of payment due dates and when late payment penalties would be imposed. Allow consumers to protest interest rate hikes by canceling the card and paying off the balance under the old terms.

LaFalce said that consumers "should not be tricked or trapped into escalating interest rates and unnecessary fees." A summary of the bill can be found on the Democrats' Views web page on the House web site (http://www.house.gov/banking_democrats/).

If you would like to share a story about credit card abuses with CA, please e-mail editor Linda Sherry (.(JavaScript must be enabled to view this email address)). E-mail also can be sent directly from CA's web site (http://www.consumer-action.org/).

You can also write to the editor at Consumer Action, 717 Market St., Suite 310, San Francisco, CA. In e-mail and letters, please include your full name and indicate if you would agree to speak with lawmakers and the media.

Can't rob consumers of right to jury trial, says high court

The California Supreme Court on Feb. 24 declined to review an appellate court's decision that Bank of America can't force its credit card customers to resolve disputes through binding arbitration instead of the courts. The high court decision is final unless the bank decides to seek review by the U.S. Supreme Court.

"This is an important victory for consumers and sets a precedent for the entire banking industry," said James C. Sturdevant, who represented the plaintiffs in Badie v. Bank of America. (Consumer Action is one of the plaintiffs.)

"All terms are not subject to change," said Sturdevant, qualifying the catch-all phrase long employed by banks. "You can't take away someone's fundamental right to sue without their explicit consent."

The Badie case was decided against the consumer interest in San Francisco Superior Court in 1994, but reversed last November by the California Court of Appeals in San Francisco, which ruled that the bank had no right to impose an arbitration clause without the consent of its customers.

The case stems from 1992, when Bank of America unilaterally changed its customer agreements to include a mandatory arbitration provision. The policy change was announced by way of inserts in customers' monthly bank statements.

Consumer Action joined a group of the bank's depositors in the suit, arguing that the bank's notice of the significant change had been deliberately buried in a statement stuffer and couched in legalese.

Mandatory arbitration-also known as alternative dispute resolution (ADR)-requires all parties in a dispute to submit to binding arbitration as an alternative to the court system. Mediators in such cases are usually lawyers or retired judges working for associations or companies which charge by the hour.

The appeals court decision will affect about more than 12 million Bank of America credit card customers who had accounts prior to 1992 when the bank tried to unilaterally impose binding arbitration on its existing customers. New individual account holders and credit card customers still can be asked to sign arbitration agreements. Most commercial banks today have followed BofA's lead and ask that new customers agree to use arbitration to settle disputes.

While binding arbitration is increasingly used by real estate, construction, insurance and brokerage firms, Consumer Action and other consumer advocates believe that it is important for people to be fully informed about the process and to be given a choice whether or not to participate.

Consumers may want to consider these points about arbitration:

• Companies are more likely to employ arbitration firms on a repeat basis and this could give the commercial interest an unfair advantage over consumers. Ask if the company uses the same arbitration firm exclusively, or if you would have a choice.
• Look for arbitration agreements that call for an arbitration panel with at least two members-not a single arbitrator-and that allow you to choose at least one of the people who will sit on the dispute resolution panel from a pool of arbitrators.
• By agreeing to binding arbitration to settle disuptes, consumers are legally bound by the arbitrator's decision and have signed away their right to a court trial and future appeals.
• Non-binding arbitration is less restrictive than binding arbitration and has the advantage of giving disputing parties some of the cost-saving benefits of arbitration, while leaving a court trial as a last resort.
• For consumers, it is becoming increasingly difficult to do business without signing an arbitration agreement. If you refuse to sign the arbitration clause, you might be shown the door. As an alternative, ask if it is possible to amend the arbitration clause before you sign it.

CA awarded HUD grants

Consumer Action (CA) learned on Jan. 17 that it will receive a $2 million grant from the U.S. Department of Housing and Urban Development (HUD) for a national multilingual education campaign to inform consumers of their fair housing rights and opportunities.

CA's Ken McEldowney is working with HUD to develop what will be included in the anti-housing discrimination project. "We will announce the full scope of the project in a future issue of CA News," he said.

CA's Healthy Children Organizing Project, formerly the Lead Poisoning Prevention Project, also received a grant from HUD under its Local Lead Hazard Awareness Campaign.

The $60,000 grant will be used to educate parents and other caregivers in San Francisco's low and moderate income communities of color, where there is a high prevalence of lead poisoning among children.

Educational activities will be conducted through a community-based network of organizations developed by the Healthy Children project. The project's goal is to build the capacity of these communities to raise healthy, lead-safe children in safe, lead-free housing.

New associate director

In other news from the Healthy Children project, Shana Nelson was hired as associate director in mid-1998. Nelson holds a master's degree in public health from the University of California at Los Angeles, where she focused on community health sciences and international family health. Before joining CA, Nelson worked on hepatitis B research at the University of California at San Francisco and volunteered at Women's Needs, a project of the Haight Ashbury Free Clinics.

CA applies settlement toward consumer education

Two years of litigation charging that a major auto leasing finance company failed to adequately disclose leasing terms was settled recently on behalf of the plaintiffs by Bay Area lawyers Nancy Barron and Mark A. Chavez.

As part of the settlement, Consumer Action (CA) received a $256,000 grant to be used for consumer education. Several other consumer and legal organizations received grants as well.

"Grants such as this one are critically important to CA and its long-term goals," said Ken McEldowney, CA executive director. "We were given a great deal of flexibility in deciding how to best use this funding."

McEldowney said CA will use the money to maintain its unique multi-lingual referral and advice hotline in San Francisco and Los Angeles, expand free distribution of CA News with new pricing surveys to CA's national network of 4,500 community-based organizations and revive out-of-print but still useful publications for free bulk distribution to individual consumers through the network.

The grant received by CA is a type of funding known as a cy pres (as near as possible) remedy. Many lawyers, jurists and regulators see cy pres remedies as an ideal way to stipulate that funds won in class action cases or settlements will be put to effective use on behalf of consumers.

Others have been critical, stating that it constitutes a conflict of interest when advocacy groups receiving cy pres funds participate in class action lawsuits as expert witnesses or friends of the court.

Chavez, a consumer attorney with the Mill Valley law firm Chavez & Gertler LLP, is a champion of cy pres funding. "It's an extraordinary mechanism for furthering the interest of consumers by supporting education and advocacy by organizations involved in related efforts," he said.

Barron, of the firm Kemnitzer, Anderson, Barron and Ogilvie in San Francisco, said that the case centered on a common but deceptive practice concerning disclosure of the cost of the vehicle being leased and lease termination charges.

Many car dealers have informed consumers of the automobile's sticker price, but not of its "capitalized cost," frequently a higher figure on which leases are based. Leasing a vehicle without knowing the capitalized cost is like buying a car without knowing the price, said Chavez.

Since the law suit was filed three years ago, new Federal Reserve guidelines on leasing disclosures have gone into effect, requiring that consumers be given the capitalized cost up front.

Despite the new guidelines, Chavez said car leasing disclosure continues to be a problem area.

CA participated in the creation of a Federal Reserve fact sheet about the federal auto leasing guidelines, titled "Keys to Vehicle Leasing." For a free copy, send a self addressed, stamped (33¢) envelope to CA-KVL, 717 Market St., Sute 310, San Francisco, CA 94103.

San Francisco deep sixes ATM fee ban

San Francisco Supervisors on Feb. 17 tabled a proposed city ordinance to keep banks from charging extra ATM fees. Supervisor .(JavaScript must be enabled to view this email address)'s motion to table the plan passed 8-3, effectively killing the legislation without debate. Only Supervisors .(JavaScript must be enabled to view this email address), .(JavaScript must be enabled to view this email address) and .(JavaScript must be enabled to view this email address) voted not to table the proposal.

The proposal was an attempt to ban noncustomer ATM surcharges, typically $1.50 or more. That fee is charged on top of the fees that banks charge their own account holders when they use another bank's ATMs. (The proposal did not cover non-bank ATMs that have multiplied since the MasterCard-Visa network allowed its member banks to levy the noncustomer charge two years ago.) If passed, the ordinance would have been the first of its kind in the country.

Board President Ammiano was the chief sponsor of the proposed law, which was supported by consumer groups including Consumer Action and the California Public Interest Research Group, as well as organized labor and senior activists. Opponents-banking groups, the San Francisco Chamber of Commerce and other business interests-threatened to sue if the measure passed.

"The Supervisors who opposed the proposal knew that this is a popular issue with residents, but the city's business interests have lots of money and legal resources to tie the city up in court," said CA's Linda Sherry. "These Supervisors didn't want to lose public support by voting against it outright. They actually believe that tabling a measure is a good way to sweep a controversial proposal under the rug and save face with both sides."

Ammiano said he expected no more board action. Supporters of the plan are looking to bring a measure to regulate ATM fees before voters in November.

According to The S.F. Chronicle, a poll by David Binder for the Campaign to End Extra ATM Fees found that 78 percent of city voters would support legislation to prohibit the second ATM fee; 74 percent said they supported it strongly. The San Francisco city attorney had ruled that there was no legal reason the City couldn't enact such a law.

New CA publications

Consumer Action (CA) has recently completed the following publications:

• "A Few Facts about Life Insurance," a brochure offering an introduction to the topic. It was funded by a court award resulting from the settlement of a lawsuit brought by the Language Rights Project of the American Civil Liberties Union (ACLU) and the Mexican American Legal Defense Fund against the Northwestern Mutual Life Insurance Co.
  The suit contended that people were unfairly denied insurance becasue they didn't speak English well. The brochure is available in Chinese, English, Korean, Russian, Spanish and Vietnamese.
• "Your Guide to Starting Phone Service," a 20-page booklet that gives simple explanations of decisions people must make when they order phone service. The booklet was supported by funds from the Telecommunications Education Trust, established by the California Public Utilities Commission.
• Two training manuals for use by the staff of community-based organizations. "Questions and Answers about Life Insurance" was also funded by the ACLU court award. "Questions and Answers about Immigration" was created with funding from The San Francisco Foundation's Bank of America Consumer Education Fund (BACEF).

All publications are free and available in bulk to community-based organizations.