The Navigator: Don’t be surprised by exorbitant pay phone rates

The 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.

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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.

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 pay phone calls. California Senate Bill 50, which was introduced in December, would amend a 1993 rule requiring pay phone 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. “At the time the law was passed, using a credit or debit card for pay phone 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 pay phone 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 pay phone systems can make pay phones profitable again,” says King. “Well, duh! At nearly $15 a minute, I imagine so.”