April 19, 2011 at 9:00 AM ET
Who says people won't pay to protect their privacy? Mark Swartz is one of millions of U.S. consumers who pay dearly every month to keep personal information out of the hands of marketers. In fact, Swartz figures he's paid well over $1,000 through the years for the simplest of privacy protections -- an unlisted home telephone number.
The $4.95-a-month fee that Swartz pays is a relic from times of the AT&T monopoly, when consumers leased everything from the phone company, including handsets. But Swartz, who lives near Boston and has had the same phone number since the 1980s, is wondering what he's getting for $60 every year.
"Despite privacy laws and the fact that there is no ongoing expense to Verizon to not publish my number -- it's programmed into their system just once -- I have to pay them to not divulge my number," he said. "Absolutely ridiculous."
It's also of questionable value. In the age of Google, paid search services like Spokeo and the Do Not Call list, it's debatable how effective unlisted numbers are.
Consumers who don't want to be bothered with marketing phone calls can place their numbers on the Do Not Call list -- now 200 million strong. While unscrupulous marketers ignore that list, maintaining an unpublished number isn't enough to avoid such lawbreakers either. Plenty of paid search services promise to sell unlisted numbers, gleaned from records as far-flung as pizza delivery services.
It's also debatable how well the price corresponds to the cost of providing the service.
When Swartz initially signed up with New England Telephone in May of 1980 -- it's now Verizon -- the fee was less than $1.
"Back then things weren't all on computers and it took some recurring expense to provide the service," he said. "But now, with everything on computers, a one-time effort to code a number as nonpublished is all that is required. I cannot understand the justification for a recurring fee for this service."
Unlisted number fees vary by state, and Massachusetts has among the highest in the country. There, the price is still regulated by the state utility commission is $4.95 for everyone, according to Verizon.
A 'privacy penalty'
In other states, like California, the rate is "competitive," and is set by the local phone company. Competitive isn't exactly the right term, however, as most communities have only one land-line provider. When California deregulated the unlisted fee in 2006, it jumped from 28 cents to $1.25 per month.
"We call it a privacy penalty," said Mark Toney, executive director of The Utility Reform Network (TURN), a California-based consumer advocacy organization. "We don't think people should have to pay to keep their name out of the phone book. To the phone company, it's just free money."
And it's a lot of it. TURN estimates at half of all Californians pay for unlisted numbers -- which adds $150 million annually to AT&T's bottom line. In 2008, lawmakers considered legislation supported by TURN to eliminate or reduce the unlisted number fee. It failed, as did a similar initiative last year.
"We found that AT&T had contributed to all but eight state legislators," Toney said. "When push came to shove AT&T was able to kill the bill."
Unlisted number fees persist in part because they are a state issue -- few state-level consumer groups have the clout to take on large companies like Verizon or AT&T. And in some states, the fee is modest enough not to attract much ire -- in the Chicago area for example, consumers pay $1.70 monthly, according to that state's Citizens Utility Board.
Still, Toney thinks the cost is out of line.
"In this day and age, there are so many other ways to find people's contact information," he said.
Verizon spokesman Lee Gierczynski said he "can't speculate" on the effectiveness of unpublished numbers.
"Verizon knows that we have customers for whom privacy in a high priority, and we offer them an option to help protect that privacy and ensure that their numbers will not be publicly available," he said. And he defended the $4.95 Massachusetts price as a "regulatory-approved" rate.
But Swartz is still left wondering if he's getting his money's worth.
"Several years ago I complained and to the best of my recollection the response was that the rates are approved (by regulators.) Very difficult to get to speak with anyone who really knows what's going on or has any authority to satisfy a customer," he said. "To add insult to injury, they include my telephone numbers in routine emails to me -- so much for protecting my privacy even when I pay for it."
RED TAPE WRESTLING TIPS: Courtesy of the Illinois Citizens Utility Board
*Always ask what "unlisted" or "nonpublished" means before you sign up for the service. Unlisted means simply that that the phone number is not in the phone book. It's probably still available through directory assistance and shows up on Caller ID. "Nonpublished" probably means that the number will not be in the phone book, directory assistance or show up on Caller ID. But you should still double-check.
*AT&T callers can block Caller ID by hitting *67 before dialing. Doing so blocks your name and number from being sent on calls – and prevents others from capturing your unlisted number. It's free and you can read more about it here.
*Phone companies can lure people into even pricier privacy services. AT&T has Caller ID and "privacy manager," which screens calls marked "private" on Caller ID. This, again, is probably a waste of money for most customers.
*If you're worried about telemarketing, join the free Do Not Call list. It's free. Call 1-888-382-1222. But signing up won't prevent you from getting all telemarketing calls. Charities and political calls, for example, are exempt.