immediate release -- Thursday, October 16, 1997.
Bob Brammer - 515-281-6699
Challenges Texas Company on "Negative Option"
DES MOINES-- Attorney
General Tom Miller today issued a letter directing a Texas company to stop
contacting Iowa businesses with a "negative option" mail solicitation that
indicates the businesses will be charged $9.95 per month for an 800-number
directory service unless the businesses affirmatively reject the offer.
for 800-Number Directory "Service"
solicitations are illegal," Miller said.
Miller said his office
was contacted Wednesday by Iowa businesses that received the mailing from
"UDSI," with a post box listing of Hurst, Texas, near Dallas. The solicitation
says UDSI provides a commercial directory service for toll-free 800-numbers
used by businesses. The UDSI directory service is reached by calling 1-800-555-1414.
says near the end: "Unless you instruct us otherwise within 14 days, your
toll-free number will automatically be given out by live, friendly operators
to customers all over the world for only $9.95 per month," billed on the
business's local phone bill.
Miller said the Consumer
Protection Division of his office issued a formal "Demand for Information"
to UDSI today, directing the company to provide the names of any Iowa
businesses it had billed for the directory service and advising UDSI to
cease using the solicitation in Iowa.
have no obligation to pay any billings based on this solicitation," Miller
solicitations are illegal and for good reason," Miller said. "Recipients
may well consider them junk mail and throw them away without ever reading
the negative option language, and they might not notice if they are billed
later for some so-called service. It's simply unfair."
Miller said his office
had challenged previous "negative option" solicitations. For example,
several years ago TCI Cable indicated it was upgrading people's service
-- and raising their monthly bill -- unless people affirmatively said
they did not want the upgrade. Last year, America Online said it was changing
people to an unlimited access service -- and raising people's monthly
bill -- unless people took action to decline. In both cases the companies
changed their solicitations and stopped the "negative option" practice.
"The UDSI negative
option is particularly objectionable because the Iowa recipients had no
prior business relationship to UDSI," Miller said.