New law aims to short-circuit public phone overcharges

1-no phoneThe trouble started when Tom King’s cellphone died on his way to a job interview last year. He saw a public phone at Washington’s Bainbridge Island Ferry and was relieved when a sticker reassured him that he could make a four-minute call for $1, he says.

That didn’t turn out to be entirely accurate. King made four one-minute calls using his credit card, for which he expected to pay $4. But a few days later, he discovered that he’d been charged $14.98 for each connection, for a total of nearly $60. “I was shocked,” he says.

Stories like King’s are a cautionary tale for travelers. Fewer than 500,000 public telephones remain in the United States, operated by a network of independent telecommunications companies that set their own rates, which can often be startlingly high. Verizon, the last major telecommunications provider of pay phone services in the United States, left the industry in 2011 when it agreed to sell almost all its remaining 50,000 phones.

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Stories like King’s have also inspired one California state senator to propose a law that would require telecommunications companies to disclose credit card charges for payphone calls. California Senate Bill 50, which was introduced last month, would amend a 1993 rule requiring payphone operators to disclose the cost of a call so that it would also include any calls made with a credit or debit card.

Telecommunications companies are taking advantage of a “loophole” in the rules, says Sen. Ted Lieu of California. “At the time the law was passed, using a credit or debit card for payphone calls was uncommon, and thus not addressed by the law.”

Consumer advocate John Mattes, an attorney who has unsuccessfully sued several companies offering these pricey calls from public phones, says that he hopes the legislation will have a ripple effect, encouraging other states to adopt similar disclosure requirements and eventually compelling the federal government to close the loophole once and for all. “It would be a long-overdue victory for consumers,” he says.

No one knows exactly how many travelers have fallen for these phones, but there have been plenty of reports of overpriced phone calls. Last year, several media outlets reported that U.S. soldiers in transit through Germany were being billed up to $40 for a one-minute phone call home via a company that claimed to be based in Switzerland. But problems with credit-card calls from public phones cross my desk with some regularity, and normally, my inquiries on behalf of the customer result in a partial or full refund.

King, who’s a writer by trade, didn’t take the $60 charge lying down. He tracked the charge to a company called WiMacTel, a company based in Palo Alto, Calif., that offers payphone services to “inmate facilities, payphone operators, hotels, hospitals, universities/colleges, local exchange companies and consumers nationwide in the USA and Canada,” according to its Web site.

“WiMacTel promises customers that their payphone systems can make payphones profitable again,” says King. “Well, duh! At nearly $15 a minute, I imagine so.”

James MacKenzie, WiMacTel’s chief executive, says that the $1 rate on the pay phone King saw was for coin calls, not credit cards. “Unfortunately, there is insufficient space on the payphone to provide all the various rates associated with operator service calls,” he told me.

Instead, customers can opt in to disclosure through a series of voice prompts when they use WiMacTel’s service. MacKenzie acknowledged that credit-card call rates were significantly higher, attributing them to the “higher costs” associated with those types of calls, including the expenses incurred by having to validate the payment method, billing and collection, bad debt, offering live operators and credit card processing fees.

However, after King complained, the company lowered his bill to $22. “Still pretty high for a payphone call,” King notes.

Excessive phone charges used to be one of the staples of my consumer advocacy practice. Hotels considered their phone lines a profit center and would add generous surcharges to their guests’ phone bills, sometimes even imposing fees for lifting the phone from the receiver. That’s largely gone now, thanks to the preponderance of cellphones.

But a smaller threat remains. Sen. Lieu estimates that his bill would affect roughly 30,000 public phones in the state of California, located in places where constituents can least afford the high charges, including prisons and hospitals.

How do you avoid these fees? Keep an extra battery handy when you travel, so that if your cellphone goes dead, you won’t have to resort to using a payphone. If you must use a pay phone – and there are still times when you’ll need to, such as when there’s no reception – then buy a prepaid phone card.

Given the risk of being overcharged by credit card or debit card, you should reach for your plastic only as a last resort. Try using coins or bills to pay for the call, if possible. We’re still a long way from closing the disclosure loophole for credit-card calls, and until then, it seems, your payphone calls could cost a lot more than you expect.

Should public phones be required to disclose calling charges when you're paying by credit card?

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35 thoughts on “New law aims to short-circuit public phone overcharges

  1. I’ve loan my phone to traverlers in airprot many time. Inclusing a Morman missoniary who I sat next to on way to Atlanta from Chile. He had badly written instruction to call a toll number in Salt Lake City to say he was in US. (So the Morman church could not spring for a 800 number?) He called, left them a message, I walk’ed him to his connecting gate, Few hours later the missionay office called my cell back looking for him.

  2. A couple of years ago I tried to use a prepaid phone card in several public phones in NY, NJ & CT, but I wasn’t able to complete the toll-free call to the prepaid card operator. I was obligated to use some coins (to a toll-free number!!!) in order to perform my long distance calls. It really annoyed me.

    1. That is against FCC rules also. You should not need a coin to make a toll-free call from a payphone since the payphone is compensated on a per call basis by the long distance company (that services the toll free number).
      It is possible that is a private pay phone.

  3. It happened to me in Amsterdam Centraal Train Station, It display the credit card charge rate but when you call yourself by keying the number and your credit number as ask by the machine they don’t let your call through and an operator answer your call and it ask you if you want to go ahead with the charge, If you say yes it’s the operator handling rate apply which is 10 times the rate announced. It’s a very rare occasion I get robbed by traveling abroad, but get robbed by a telephone company is my first robbery experience ever. Never had a problem in a remote Africa, nor Asian jungles but in Amsterdam Centraal Station for a road warrior, it’s a real insult. The lost is 35$ and I consider a cheap lesson.
    It like a kind of Bait and Switch.

  4. Off subject: Chris, I think it might be time to change your website services. Yours is the only blog that I regularly read – so I don’t know if this is common – but you’ve been having “technical problems” seemingly once a week recently. This AM, when I visited your site – or tried to – I was directed to what appears to be your publishing software’s sign on page. Once that was fixed, I couldn’t view any article, getting the dreaded “404” error. I’m computer illiterate enough to allow for the possibility that the problem MAY be on my end, but it’s usually just your site that has the issues.

      1. Also, your pop-up prompting me to join your email list is annoying. Can you put that as a link somewhere? If I disable popups on your site, Disqus doesn’t work. (I use Firefox and Safari)

          1. Well, the problem is my system is cleaned of cookies (all of them) on a regular basis, so yeah, I see that annoying pop-up just about every time (as in the first time on a given day) I visit the site. It’s true that during this visit, I only saw it once, but when I visit next week, I will end up seeing it again. I keep thinking, there’s got to be a better way, and respectfully, I agree with Raven. Make it a link, or somehow recognize that I came to the site via the email.

  5. Always amazes me that, even on issues as uncontroversial as this, there are still some contrarians who feel the need to oppose the obvious

      1. Methinks y’all are taking this just a tad too seriously. While I’m sure you have your share of haters, Chris (who doesn’t?), I suspect the bigger culprit is people with juvenile senses of humor that purposefully pick the most ridiculous answer in a poll just to see the inevitable reaction that it garners. I’ll confess to have done the same thing when I was in high school. Of course, I was also 15 at the time and Beavis and Butt-head was my favorite TV show.

      2. I’m not a hater, but a payphone is just meant as a convenience. If you don’t like the price, call their customer service and get a credit. Or call your credit card company and chargeback the full price if WiMacHell doesn’t credit the call.

    1. It may seem obvious to you and I, but it may not be so obvious to others and we should respect their opinions. There are only 7 no votes right now, but I would not assume they are just because someone wants to be contrarian. A sizable number of people are strongly opposed to government intervention in how a company chooses to offer a service. And, there may be a few employees or owners of these companies who stop by to read what is said about them and also disagree that there should be disclosure requirements placed on them. These are both positions I strongly disagree with, but they have the right to these opinions and should not be assumed to be doofuses or pranksters every time.

      As someone who has voted in the minority occasionally I was rather offended that my votes were sometimes chocked up to juvenile behavior or pranks, when I had what I felt was a reasoned argument for my opinion.

      1. You were offended that someone on a website had an opinion that you didn’t like? Are you that insecure? You felt the person who thought the,”no” votes were juvenile, or being facetious so you automatically equated it with you? Why on Earth would that offend you? If you have a reason to vote no and you know you voted with a serious and intelligent point of view then why would you care what anyone else thinks? No one was directing anything toward you or your opinion, they were stating their opinion so why, how, could that have, “rather offended” you?

  6. I’m probably in the minority, but I always carry a prepaid phone card with me. It’s a major carriers card (AT&T) so even when I travel internationally I can use their access numbers (which are toll free). It’s come in very handy in the past and the rates are much cheaper than cell, credit card, or hotel room phone rates back to the US.

  7. Payphones are like VHS tapes…relics of the past. I would advise asking a stranger to borrow their phone before using one of these. I have loaned my phone to random people before, but always asking if they’d let me hold their wallet while they held my phone. (Trust no one…especially in train stations…)

  8. Since the WiMacTel CEO explained to you that there was not enough room on the telephone unit itself to disclose the rates, I also went to the company’s website to look up the calling rates there. I couldn’t find any listed rates. From the website’s sitemap, I found a page “dedicated” to “Rates and Tarrifs” [sic],, but the page is completely devoid of any information. Thus, my conclusion is that the explanation of WiMacTel’s CEO is mere pretext, that the company simply does not desire to readily disclose to its customers its charges, and that its CEO deserves a Pinocchio award.

  9. Of course all consumer transactions should be fully disclosed — this includes payphone calls, airline ticket prices including fake “fuel” charges and the like, hotel “resort fees”, health care (yes, the doctor should have to tell you if they’re going to mark this question as an “additional issue” that will cost $100+ more than the standard checkup), automotive repair (which is actually one of the more regulated already; they always give me an estimate up front and call before charging more).

    Personally, I’d dispute the charge on the non-disclosure basis. Worst that can happen is a denial. Let them take it out of the supposed “higher costs” that they’re charging everyone else.

  10. This is interesting in that this bill is being introduced here in California. Wouldn’t this be a surcharge for using a credit card? If so, I would California Civil Code 1748.1 which prohibits credit card surcharges would cover them here. But then, the operator of the payphone may not be considered a “retailer” which the law is written around.

    1. Not a surcharge as defined in that law.

      The pay phone rate is charged as a per minute amount. The fact that it is several dollars a minute is ridiculous, but that is what they charge. A surcharge would be an additional amount added as a separate additional charge to the base rate. Such as $1.99 a minute + $5.00 for using a credit card. A fine line, but is unfortunately legal.

      1. That’s just word games by the bottom feeding lawyers. It is a surcharge on the per minute base rate. Something you are not charged if you don’t use a credit card. That, to me, makes it a surcharge.

      2. From the story it sounds more like it is a charge added onto the base per minute rate. Oh well. Haven’t used a pay phone for years just because of these hidden charges and not planning on ever using one again.

  11. I use, where I prepay for phone calls both nationally and internationally. The charges are nominal. They have a list for rates per minute to each country. You call either an 800 number (more expensive, but still cheap) or a local access number, which you have to pay for (the per-minute rate is cheaper.) Then you are prompted to enter the phone number you are calling, after which you are told how many minutes you have left on your account according to the charge for this call. They also have free access numbers in other countries so that you can call within that country or home. It comes in handy when not having use of a cell phone.

  12. Within the US I use an AT&T credit card (have had for 20+ years, was a charter member, now part of Citi, but original advantages still apply). Using an 800 number, I get 30 mins free domestic calls each month, plus I can call to Europe for half that rate, I.e. 15 free mins each month. I keep $40 or so in the account to pay for calls at 10 cents a minute domestic or 20 cents a minute to Europe if needed. The dialing is cumbersome, 800#, then card number, then listen to AT&T publicity, but the price is right, and it is a good backup, plus I always have the credit card with me. Highly recommended if you can still get the card.

  13. One of my credit cards provides long distance calling services via an 800 number on the card, check with your credit card provider, many offer a range of interesting services if you read their brochures. Another one I have doubles warranties on items bought with it, thus I can politely decline those “upsell” jobs you get with anything more complex than a chili dog.

  14. I forgot my charger on a trip to Las Vegas one weekend and my phone died rather quickly. Not knowing any better, over the course of the weekend I used my card to make two quick pay phone calls to friends to figure out where they were/how to meet them. I was appalled when I got home and realized those collective four minutes of connectivity cost me in excess of $60. I figured it was a Vegas thing and my lack of fully checking the rules and didn’t protest. Now I wish I had.

    But a hotel worker friend gave me a tip for the future: If you’ve forgotten your phone charger and are at a hotel, ask if there are any in lost and found. Generally speaking, they have dozens of unclaimed chargers of all types and they’d be happy to lend them out or just give one to you. So… there you go.

  15. Shouldn’t be too hard. 25 cents a minute. $1.50 credit card charge. Lots of room for profit there. No need to charge $60 for a call.

  16. WiMacTel is actually owned by Quortech and based in Calgary, Canada. Ok, to their benefit, there are probably only 2 calls made from a payphone per month, so somebody has to pay the line cost. Why didn’t King complain about the $6 cokes on the ferry? Because it’s normal to pay a higher price for convenience, albeit $15 per minute is a tad bit high.

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