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Sunday, December 23, 2012

Hang on to Your Wallet: The Hazards of Payphone Credit Card Use

© 2012 by Tom King
Let me say up front that I’m not an investigative reporter.  I don’t have access to the kinds of vast information resources available to credentialed reporters. I am, however, a mule-headed freelance writer and the poor schmo who made the mistake of sticking his credit card in the payphone at the Bainbridge Island Ferry Terminal.
I usually don’t use the pay phone. Like most of us now, I have a cellular phone that works pretty much anywhere except, of course, when you absolutely need it like I did on September 18, 2012.  I found myself in the Bainbridge Island Ferry Terminal with a dead cell phone and no change and a job interview in 15 minutes.  I found a payphone in the terminal that said "$1 for 4 minutes" in big red and white letters. To my relief, there was a credit card slot in the phone.
I had difficulty making my connection - the line kept return a shrieking data noise and dropping the call, so by the time I got hold of someone, I had to make a total of 4 one minute calls in order to let them know I had arrived so I could be picked up.  To my shock, I discovered the next day that I was billed $14.98 for each of those 4 one minute calls – almost sixty bucks!
I looked up the website for Washington State Ferries and sent them note.  Now, I know they don’t operate the pay phones themselves, but they do allow the company that looted my debit card account to operate in their terminal.  I believed they were perpetrating a deliberately deceptive trade practice that defrauds Washington State Ferry customers. 
Most people would blow off a $14.98 overcharge as bad luck, but four times that becomes a little more of a serious matter, especially in my case. I was on the Island to interview for a job and my funds were limited (being unemployed and all). I had no idea my credit card had been tapped for nearly $60. I was lucky to get back home at all.  I had less than $2 left in my account. I wanted to stop for lunch and take the early bus home because my bad knee was giving me a world of pain.  If I spent as little as $2 on lunch, though, I’d have been stranded in downtown Seattle, a lonely little conservative surrounded by Occupy Wall Streeters, not to mention 50 miles from home and flat broke.
In my letter I asked Washington State Ferries to place warning signs by the phones to let customers know that using a credit card instead of cash with those phones can result in an almost $15 charge rather than the $1 advertised on the phone itself in big friendly red and white letters.
I also suggested they threaten the company that operates the phones with removal of those phones from all their terminals.  I mean, that’s what I would do if I found a contractor was deliberately conning my customers with a slick scheme to overcharge them for payphone calls.
And yes, the phone company will tell you (if you can ever find a phone number to call and ask) that you can find out how much the charge by following "a series of voice prompts".  This is true.  It also adds time to an already ruinously expensive phone call and hooks you up to someone whose English is difficult to understand.  They’ll claim that because they have a voice prompt system, there is no excuse for not knowing the phone call might be hideously expensive.
I still maintain it’s a species of fraud.  The company knows full well, most people will trust the posted charges as shown on the big red sign in front of their face and in the rush won't read the fine print. The practice is downright deceptive.  If someone starts a nice class action suit I want to be included.
Look, I don't believe that Washington State Ferries is in any way complicit in deliberate fraud or price-gouging.  After I got in touch with the Ferry company, the charges disappeared from my credit card bill along with any evidence that I ever made the call.  Then a few days later, charges reappeared on my phone card, but they had dropped to around four to five dollars this time.  Whether they would have if I hadn’t raised hell about it, I don’t know.  If they gave back the money whenever some intrepid customer managed to find their customer service number, they’d still manage to pocket a whole lot of cash overcharges for phones they operate in prisons and in bus, ferry and airline terminals.
I did get in touch with the phone company.  I remembered seeing something like WiMacTel on the phone in small letters – I was looking for who to get mad at during the fourth phone call at the time.  I spent three hours tracking the company down.  As it turns out, WiMacTel is one of several dozen aliases under which a company called QuorTech does business.  QuorTech is owned by private equity firm QuorTech Equitites, along with sister companies iTechnology Customer Service and Support, Inc.; QuorTech Freight and Logistics; and iTechnology Digital Advertising Solutions.
I couldn’t find much information about QuorTech*, but its subsidiaries, particularly WiMacTel, showed up on numerous pages that linked to the company regarding complaints about payphone scams.  The only way I was able to connect WiMacTel to its mother company was by doing a lot of digging in public records.  They were not easy to find by name. The company website has changed since this past summer. I didn’t find its service as helpful as the company advertises. They only managed to help themselves to an overnight loan of $60 at my expense.
I checked out their sales pages and found that WiMacTel (and its sisters) offer “solutions” to the declining revenue trend for vendors operating public payphones. WiMacTel promises customers that their payphone systems can make payphones profitable again. 
Well, duh!
At nearly $15 a minute, I imagine so.  I suspect the company is doing like a lot of motels and other public venues.  When you authorize your credit card at the beginning of the call, they place a “hold” on your card before billing you the final charge.  Often the hold is quite substantial.  I ordered a $1.32 computer part from Alliance Electronics over the weekend and they placed a $71 “hold” on my account till Monday when they reopen and actually ship my item.  Not happy about that at all, but to their credit, on receiving my email, Paul Bolton at Alliance fixed the problem and credited my account.  I understand why they did it, but you'd better understand how credit card holds work or you can find yourself short for a few days while the transaction takes place. 

In November I paid for a week’s hotel bill and they put a hold on it for the full amount, completed the transaction and then didn’t remove the hold for a couple of days afterward leaving my account empty till they released the hold. 
I have no idea whether the credit card actually transfers the hold to the merchant or not when it's held, but either way, someone’s got your cash and you can’t use it till they let go.
A lot of people aren’t aware that merchants and service providers do that kind of thing until they try to use their credit cards and find a big fat hold has emptied their account. Sure, they release the “hold” after you pay, but often the hold doesn’t get released for a day or two after they complete the transaction. Meanwhile your account is maxed out because it’s carrying a double charge leaving you with a dead credit card for several days.
You might not even notice what’s being done if you have a large credit line and keep your credit card bill paid down. After all, the charges and, in the case of WiMacTel, all evidence of the charges disappears later so you don’t even notice they froze your cash for a couple of days at your expense.  I noticed because as a struggling writer, my funds are limited and because of WiMacTel’s “solution to declining payphone revenues”, I was forced to stand in drizzling rain on a benchless commuter rail platform for more almost two hours with a painful knee waiting for the first afternoon train. And even after WiMacTel dropped the $14.98 charges they did charge me for the calls - $4.98, 5.00, 5.05 and 7.50 - the longest of which was 2 minutes.  Still pretty high for a payphone call.

You might have detected that I was not very happy about that either.

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