Unsuspecting consumers are being charged thousands of dollars more than they should be on their phone bill, sometimes without being told the reason for the excess charges. However, few consumers burnt by the sting are prepared to talk about it.

The practice is known as "Internet Dumping", and typically involves tricking your computer to call a costly 190 number instead of your usual Internet connection. A program called an auto-dialler is downloaded onto a users computer to make the switch, and often the only warning given is a pop-up box asking if the user wants to continue.

These numbers are typically charged at rates of AU$5.50 per minute, rather than 10c per minute, the highest you're likely to pay for dial-up Internet access through an ISP. It's not unusual for unwitting users to spend hours connected to the Internet, on the higher rate, as they are unaware they have been connected at the higher rate.

The "auto-dialler" programs often infect unwary computer users from porn sites so victims are often too embarrassed to chase the matter further. And even if the 190 number is traced back to a specific company, many have been known to refuse to disclose the service being charged for.

Teenagers are particularly at risk, with a high number of reported cases of internet dumping involving teenagers using the computer at home, unaware of the charges they are incurring.

One 14 year-old we interviewed, thought the pop-up was just a warning that by clicking 'yes', he was confirming he was over 18. "I never knew that by pressing yes it was going to cost so much," he said. "Maybe I didn't read the message properly, but I don't remember it saying anything about money." His mother had to foot the Telstra bill of more than AU$250, a relatively small amount compared to some cases.

Another victim, we spoke with has charges in the thousands of dollars, gained due to his limited understanding of english. When presented with a "yes or no" prompt he clicked "yes", without having any real idea what he was entering into.

"There's no doubt that dumping complaints are on the increase in a major way," said John Pinnock, the Telecommunications Industry Ombudsman.

In the first quarter of this year the Ombudsman received 274 complaints about Internet Dumping, which increased by 34 percent the following quarter to 368. In the July-September quarter the number of complaints jumped a further 63.6 percent to more than 600.

If the trend continues, the first half of the 2002-03 financial year will see as many complaints as occured in the previous 12 months.

According to Pinnock, there is an absence of real consumer protection in this area. "The notice that people are put on may not be very good, and even if it is there are still very, very high unexpected charges," he said.

Most of the complaints concern amounts in the order of several hundred dollars, but some are much higher. "We've got one in the office that is AU$10,000, that is the largest I know of," said Pinnock. The consumer group coalition, Consumer Telecommunications Network, claims to have received reports of cases involving up to AU$60,000.

Exacerbating the problems consumers face when attempting to challenge the charge, no single agency exists to regulate 190 Internet diallers, so it is difficult to know what to do when they find themselves saddled with an enormous bill.

"There is an argument about just where the TIO jurisdiction begins and ends with some types of services, because another body works in the area," said Pinnock. The other body is the Telecommunications Information Services Standards Council, an industry-funded organisation that regulates the premium-number industry, including 190 numbers.

The council consists of three community members, two 190-service providers, a member from the telephone company and an independent chairman. The Council overseas the voluntary 190 code of practice, which outlines the expected behaviour of companies that provide premium number services.

The Code of Practices mentions Internet Dialler Services, and sets out various rules service providers should follow. The rules include automatically ending the connection after five minutes of inactivity and displaying the message "THIS SERVICE IS NOT FREE" in upper case bold and prominent font across the top of the introductory box.

In practice, not many auto-diallers follow the regulations.

What are the rules?

There are a couple of factors adding the the difficulties faced by legislators when it comes to combatting Internet dumping practices.

Governments often come under fire for attempting to regulate the Internet, as it's perceived as both unworkable and a form of censorship. And while other industries have been around for decades, allowing ample time to sort out the nuances of regulations, the Internet is still effectively less than a decade old.

Premium number services which provide access to the 190 numbers are regulated by the Telecommunications (Consumer Protection and Service Standards) Act 1999, which required telephone sex lines to preregister potential customers and provide them with an access PIN.

According to Robbie Swan, media director of the Eros Foundation, the regulations set out in 1999 resulted in a collapse of the industry. Before the legislation 1.4 million calls per month were made to ten or twenty service providers, and just six months after it was brought in only 35 people had registered with the scheme. He claims the scheme removed an essential part of the service, that of privacy.

However, the legislation does not cover 190 numbers accessed over the Internet, and leaving ample room for service providers to take advantage of what is essentially a legal loophole and claw back some of their revenue. What's more the Internet provides the added advantage that consumers don't have to physically dial in the numbers.

Teresa Corbin from the Consumer Telecommunications Network believes there are massive flaws with the laws governing this phenomenon. "Some gaps are so big you can drive a tank through them," she said.

Corbin believes the largest problem is the fact the Internet is such a grey area in the law, as it is governed by a combination of State and Federal laws. There has never been a court case against the companies that provide these services in Australia, so legal precedence has yet to be established.

The Government is slowly moving to curb the practice of Internet Dumping. In May this year Senator Alston, the Minister for Information Technology, Communications and the Arts, released for public comment draft regulations proposing 190 numbers only be accessible through a PIN, which was designed to close the loopholes in the legislation.

However, by the time the legislation was released in November, the proposals had changed to a monthly price cap on the charges from 190 services, as well as moves to enshrine the current Code of Practice that regulates the industry into the Telecommunications Act.

Adam Rowbottom, the president of the Telephone Service Providers Association of Australia, told ZDNet Australia   the Code was one of the best in the world for premium rate services, and didn't need the extra strength of being registered in the telecommunications act.

"It's interesting to look at regeristing a code of practice when the telecommunication act and Alston's own thoughts are for self regulation," said Rowbottom. The Australian Communications Authority, the government body which would would enforce such regulations, said it is still waiting on an official direction from the minister's office.

There are several problems the government faces when attempting to regulate Internet Dumping. The first is the ever-changing nature of the Internet, allowing sites to quickly remove or modify material to comply with the law. Content is often based offshore, making regulation of the content and messages very difficult. In addition, pop-up messages are sometimes so brief they are practically impossible to read, yet at the same time serve to satisfy basic legal requirements.

While the move by Senator Alston has focussed some attention on the phenomenon, Australia is still a long way from solving the problem. The concern remains that any new legislation will contain further loopholes, allowing these companies to remain one step ahead of the law, and continuing to leave consumers out of pocket.

A timeline of entrapment

As you are surfing the Internet one evening you click on a link, which creates a pop-up box asking if you wish to continue. You click 'yes', and the computer slows down, makes a few odd noises and then opens a window to a pornography site. You close the window and continue surfing, thinking no more about it.

A few months later you receive your phone bill, and almost have a heart attack when you realise it is five hundred dollars more than it normally is. The extra charge is for a 190 number, and is listed as 'Internet Access'. This is not your normal Internet Service Provider, and you assume there has been a mistake, and call Telstra to sort out the problem.

The helpful Telstra support person tells you there has been no mistake, and you need to call the company that leased the 190 number to sort out the problem. Upon calling the company, they confirm there has been no mistake and you will have to pay the charge. You tell them you have no memory of using any service of theirs, and ask them what service was provided. They refuse to tell you, claiming they need to protect their client's privacy and are under no obligation to inform you as to what service you are being asked to pay for.

You call Telstra again, and tell the helpful support person you didn't use the 190 service and won't be paying the charge. They reply that Telstra records show a 190 number was dialled from your phone, and if the charge is not paid the telephone service will be cut off.

You curse, threaten, plead, extol, and eventually pay the charge, ending up $500 out of pocket.

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