| Excerpt
from a letter from the Office of the Attorney General, dated
10/10/2000:
I
write on behalf of the New York Attorney General to apprise
you of a widespread consumer problem affecting subscription
to commercial Internet access in the State of New York.
I do so in the hope that you will cooperate with our efforts
to apprise consumers of their rights and liabilities in
subscribing to your company's services, as discussed below.
The
Internet Bureau of the Attorney General's Office has received
complaints from a large number of consumers regarding "hidden
charges" for their Internet service. Based on these
complaints, we have found that many consumers who sign up
for Internet service are not aware of the possibility that
they may incur per-minute charges through their telephone
company, in addition to the access charges they agree to
pay to their Internet Service Provider ("ISP").
In particular, consumers often are not aware when selecting
an access number that the telephone number they select may
not be a local number--but in fact may involve long
distance or regional telephone charges. Sometimes, this
occurs because consumers presume that any access number
within their area code is billed as a local call. In other
cases, consumers are led to this presumption by their respective
ISP's misleading use of terms such as "local"
during the access number selection process, e.g.,
"please select a local number from below."
According
to the complaints we have received, this confusion has resulted
in many Internet service subscribers incurring extraordinarily
telephone bills for their first one or two months of ISP
service--often totaling several hundred dollars, and sometimes
well over $1,000.00.
Yet
this confusion easily can be avoided by ISP's apprising
consumers up-front that they should not merely select an
access number based on their area code or general geographic
area, as some telephone numbers that share the same area
code or are designated for use by a general geographic region
nevertheless may be associated with toll charges. We believe
that ISP's should further specifically warn consumers to
check with their local telephone companies, rather than
making any assumption about whether their chosen access
number is a local one.
The
Attorney General therefore is investigating industry practices
in connection with the above problems. As part of this investigation,
we request that you provide the documents set forth. We
believe that in many cases ISP's--including your own company--have
both an ethical and legal duty to apprise consumers fully
of the above potential costs, particularly in light of the
widespread consumer confusion that we have now reported
to you. You should, for instance, be aware that under New
York law, the may exist an affirmative duty to disclose
where one party has notice that the other is acting upon
a mistaken belief as to a material fact. Likewise, references
to "local numbers", such as on an ISP's sign-up
page, may mislead consumers into believing that telephone
numbers listed in their area code are, indeed, billed to
their accounts as local charges.
Likewise
it is good and responsible business practice to ensure that
your potential customers are aware at the outset that they
must take particular care to select a local access number--even
if this means in some cases that they will have to look
to another ISP to provide it. Surely, no conscientious ISP
wishes to enlist subscribers based on a material misunderstanding
regarding the costs of service.
Very
truly yours,
Kenneth
M. Dreifach
Assistant
Attorney General |
