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Phone card isn't cheap way to call

NEW YORK — Janet Oseroff of Manhattan signed up for her new calling card from the local phone company, Verizon Communications, in early December, and the plan seemed quite clear.

"Your calling card has a simple flat rate," a letter from the company said. "That means you never have to worry about what time it is when you use it, you'll get the same, low 35-cent-per-minute rate on your Verizon Communications domestic long-distance calling card calls."

"Just be certain to first dial 1-800-255-CALL," said another letter she received. "This will ensure you get the low Verizon rate we promise, without any surprise charges from other telephone companies."

But Oseroff was surprised, when, after following those instructions, she received her next bill from Verizon.

USAN Inc., a long-distance company of which Oseroff had never heard, had charged her $1.58 for a one-minute call from Atlantic City, N.J., to Manhattan, and $8.66 for a 13-minute call from Pennsylvania to Colorado. In all, for 53 minutes of calls, USAN wanted $49.09 before taxes — not the $18.55 that a 35-cent-per-minute rate would have totaled.

Oseroff's experience is hardly unique. No matter whose card they use, callers run the risk of being charged far more than they expect.

In some cases, like Oseroff's, that's because the company offering the calling card has to use another company to carry the call, and the other company charges handsomely for its role. In other cases, it's because callers still do as they were taught for years when using a calling card: they dial zero, then the desired phone number and then the card number after the so-called "bong tone."

And in some cases, the unexpectedly high charges reflect efforts by phone companies to find profits where they can. For example, as residential long-distance calling rates have fallen below 10 cents a minute, the big long-distance carriers have in some cases raised their calling card rates.

"It said no hidden charges from other phone companies, so I thought that meant no hidden charges from other phone companies," said Oseroff, 56, in an interview, recalling her Verizon episode. "I get mad when something is morally and ethically not right and this is not right. OK, a salesperson could be mistaken and quote you the wrong rate, but then you get documentation that seems to authenticate the basic thrust of what you've been told. It's like falling into a trap."

In addition to dozens of smaller operators, all of the nation's big phone companies issue calling cards. Besides Verizon (the name Bell Atlantic adopted after acquiring GTE last year), the list includes AT&T, BellSouth, Qwest (which includes the former US WEST), SBC (which uses the Ameritech, Pacific Bell and Southwestern Bell brands), Sprint and WorldCom (which uses the MCI brand).

Consumer advocates note that there are good calling card deals available — most of them through prepaid cards that can be purchased at retail outlets like Costco. And meticulous consumers with a high tolerance for legalese can avoid some of the traps with other types of cards. If Oseroff had read all of the footnotes and caveats in those seemingly simple Verizon marketing letters, for example, she might have been braced for USAN.

But consumers who do not shop around or who are not exceedingly careful in actually dialing their calling card calls can pay effective rates of $1 a minute — or even more.

"If you let the companies direct you, they'll put you into whatever plan they can get you into, and it probably won't be the cheapest," said Jeff Blyskal, an associate editor at Consumer Reports magazine who has written about calling cards. "If you do your own legwork and shopping, that's really the only way to get the cheapest rates."

Oddly, the most expensive rates usually arise when consumers do as many were taught years ago when making a calling card call: dial zero and the phone number, then wait for the tone and enter the card number.

That is what one New Yorker did when he used his Verizon card while on vacation last summer in Vermont and on Nantucket. (He shared his calling records on condition of anonymity.) When the bills came, WorldCom had charged $6.36 for a one-minute call to Chappaqua, and $24.68 for a 20-minute call to Hastings. AT&T had charged $5.88 for a one-minute call to Manhattan and $14.78 for an 11-minute call to Scarsdale.

The problem was that the New Yorker had used his Verizon card on the networks of two companies that were not Verizon or affiliated with it; unlike Oseroff, he had not first dialed the toll-free number that Verizon had told him to call.

With a calling card these days, starting the call by dialing zero is tantamount to spinning a roulette wheel. And the house almost always wins.

Back when AT&T was the nation's monopoly long-distance carrier, before 1984, AT&T issued essentially all of the calling cards and a consumer who dialed zero was automatically connected to the AT&T network. But now there are hundreds of long-distance carriers, and when consumers dial zero, they are using the network of whatever carrier that phone has been assigned to. That default carrier can generally verify the validity of a calling card from another carrier, like Verizon, but the rates will be sky-high.

"There is no question that the most expensive way you can make a call is to use a calling card on another company's network," said Mark Siegel, an AT&T spokesman.

AT&T, WorldCom and Sprint, the top three long-distance carriers, charge a "set-up" fee for each call that is made on their networks with another company's card. For AT&T, the No. 1 carrier, that fee was 60 cents as recently as 1997. But today, the set-up fee charged by each of the big three companies is $4.99. (In addition, AT&T and Sprint each charge 89 cents a minute for such calls while WorldCom says it charges a variable per-minute rate based on the distance of the call and the time of day.)

"Everyone follows AT&T's rates," said William E. Cheek, a Sprint vice president for sales and account management. "The rates are pegged based on what that dominant carrier charges."

Siegel of AT&T said the set-up fees reflected the companies' costs.

If a consumer is using a card from another company, "we have to establish a one-time and one-time-only account for you," Siegel said. "You have to take account of the data processing and other costs associated with that on a one-time basis."

As for why the set-up charges have increased by more than eightfold since 1997, Siegel said, "We base our rates on market conditions and our own costs and we took a look at both and our rates are what they are.