Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- Thursday, October 16, 1997.
Contact Bob Brammer - 515-281-6699

Miller Challenges Texas Company on "Negative Option"
for 800-Number Directory "Service"

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.

"Negative option 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.

The solicitation 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.

"Iowa businesses have no obligation to pay any billings based on this solicitation," Miller said.

"Negative option 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.