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How Long-Distance Scams Work

        Money | Scams

Some Well-known Scams

Let's visit some of the most well-known long-distance scams. Maybe "scam" is too strong of a word -- let's call them "purposefully confusing" deals. The source of discomfort is the hidden restrictions that long-distance companies often apply to boost their rates. Unless you read the fine print, and ask questions when it says "ask about restrictions," you may feel as if you've been scammed, but the company is protected because the information was there (you just didn't see it). If, however, a company blatantly makes a statement that goes against the actual offering, you may have a case for the FCC.

Some of the techniques long-distance carriers use to lure you over to their services actually are good deals. You just have to make sure you find the good ones. Watch out for:

  • Companies sending you a check in the mail to encourage you to switch - You can cash the check, and in doing so it automatically switches you to their service whether you call them or not. However, rather than signing up for a plan that gives you a great rate, you get signed up for the basic plan that charges you as much as $0.25 a minute. You have to call to get the advertised plan.


  • Companies using old competitors' rates in their comparison charts - Make sure you verify the rates they post for competitors to make sure those competitors aren't offering a better deal now.

  • Getting a free prepaid calling card that automatically switches you over to their long-distance service if you use it - Sometimes you do have to call to establish the service and get a code to use with your card, but not always.

  • Companies offering promotional rates - Are the rates good forever, or will you be charged a higher rate after three months? Is there no monthly fee forever, or will it kick in after the promotional period is over?

  • The minimum call length that we talked about in the last section - You may get a great rate for calls over the minimum length, but if you don't reach the minimum you'll be paying very high rates. You never realize how many short calls you make until you see all of those charges on your phone bill.

  • Time restrictions for the rate you've been promised - Restrictions may not be obvious. It may be that the rate you get is only good at night. Does that fit your calling pattern? Make sure you know when you'll get the good rate and when a higher rate will kick in.

  • Using a special directory assistance company that advertises a flat rate for the service with no additional charge to connect the call - This may sound like a great deal if you have a good per-minute rate with your long-distance carrier. What you don't notice, however, is that by calling the special number for the directory-assistance deal, you're approving having the call connected and charged using that carrier's long-distance service, which is billed at a much higher rate than your regular carrier. The text "basic rates apply" might be the only statement you see that can tip you off that this is happening.

    (SOURCE: FCC)