Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 13, 1992                   TAG: 9203130009
SECTION: BUSINESS                    PAGE: D-1   EDITION: METRO 
SOURCE: By RICHARD HYLTON
DATELINE:                                 LENGTH: Medium

900 LINES ARE PICKING UP THE RING OF RESPECTABILITY

Once known for its sleazy, boiler-room operations pushing "dial-a-porn" lines and credit card frauds, the pay-per-call or 900-number industry is moving quickly into the marketing mainstream.

The pay-per-call business, which allows consumers to dial 900 numbers that cost anywhere from 50 cents to more than $50 per call, has exploded in the last five years.

As Americans use their telephones to get information on everything from sports scores and financial market performances to horoscopes and weather reports, the annual revenues of the information providers skyrocketed to about $975 million last year from 274 million calls, from $375 million in 1987, according to Strategic Telemedia, a research firm.

Within the last two years some significant government efforts to regulate the industry and eliminate some of the frauds it spawned in its early years have set the pay-per-call business on the road to a bright future. Last month, Congress passed a bill that tightens price disclosure requirements.

Because the pay-per-call business is relatively easy to get into, it has spawned legions of scam operators and sex lines that offered tape recordings of lewd conversations or an actual person ad-libbing sexual fantasies.

The sex-talk lines are shrinking as a percentage of the pay-per-call services in large part because the rules regulating these kinds of interactive telephone lines have been changed since last December to make it more difficult for companies offering these services to use a 900 number.

The Federal Communications Commission, which regulates the telephone companies, now requires that the providers of these services ensure that minors cannot use the lines. This is virtually impossible to do, so most sex talk providers are now using 800 numbers and asking callers for credit card numbers to which the services can be billed, according to Robert Spangler, deputy chief for enforcement at the FCC.

And last month the Supreme Court let stay a lower court ruling making indecent language for commercial purposes a criminal offense.

The Federal Trade Commission also has been getting in on regulating the pay-per-call industry. Over the last year the FTC has brought about 10 major lawsuits against 900-number frauds and has even won multimillion-dollar judgments.

"Credit has been a big problem in a large number of these cases," said Lydia Parnes, a deputy director of the FTC's Bureau of Consumer Protection.

"Some companies take out ads that say low credit, bad credit, call 1-900-GOLDCARD for information," she said. "And then it turns out it is just a secured credit card or a card tinted gold that enabled consumers to purchase things in a catalog."

With increased regulation keeping the heat on the frauds, the interactive telephone industry is gaining respectability and more corporate participants.