Billability, Collectibility, Reliability: American TelNet to the Rescue

Since 1992, American TelNet has been building a solid reputation as an audiotext service bureau in the pay-per-call industry. Ranked among "The Top 500 Firms In The Competitive Telecommunications Marketplace" by Telecom Business, TelNet has not only shaped a "Success Formula" in the telecommunications industry, but "has executed the equation successfully on behalf of hundreds of profitable clients throughout the world," according to their Website (

Michael Pardes, president and COO, offers some history: "American TelNet was conceived to go into the pay-per-call business in 1992; we have a history of some 10-plus years. Conceptually, we've operated the company [in the way] that we began."

Because audiotext has the stigma of being a "fading" industry, one that adult Internet sprang off and away from, the details here are important. Audiotext is about to become a billing Website's new/old best friend.

"We operate with our own B&C contracts," continues Pardes, "which allows us to put billing for usage on the telephone bill. We do this both for audiotext services and billing for the Internet."

American TelNet was created by a highly experienced group of telecom veterans, whose focus was to develop a solid infrastructure serving 800/888 and 900 pay-per-call industries. "The company has since grown into a large organization with dedicated operations, accounting, sales, marketing, and customer service professionals servicing the pay-per-call and other specialized markets," says the Website. On the pay-per-call roster are American TelNet's programs Live 1-on-1 Talk, Dateline, Recorded Programs, Sports Information, Live 1-on-1 Psychic Programs "with qualified Psychic Counselors," and various interactive psychic programs. All of these turnkey programs are available in straight or gay formats with English or Spanish dialogue.

"1992 was a boom year [for audiotext]," Pardes explains, "but it was also a year of difficulty, in the same way we've had difficulties in this business over the years. '92 reminds me of the problems associated with the carriers going out of business; those doing 900-number billing. The formation of American TelNet was to fill a void: to provide services for audiotext, including programming services, and giving the IP a guaranteed payout."

These methods, traditional within audiotext, are now being applied to adult Internet. "American TelNet is setting new industry standards," says the site, "with a creative blend of exciting, innovative information and entertainment programs utilizing 800/888/877/900 numbers coupled with various methods of billing and collections, including Checks-by-Phone and electronic billing. American TelNet's professional management team maintains an efficient service bureau, billing, and collecting company that is committed to customer success."

"The difficulty back then was associated with chargebacks," Pardes remembers. "IPs didn't know what to expect because the chargebacks were out of control. Part of the American TelNet thrust was to develop a program to provide a guaranteed payout to the customer, taking into consideration these chargebacks would be a liability for American TelNet. We formulated this guaranteed payout program, where we provided all of the services for the client, including programming and fulfillment, and then we paid them once a month so they don't have to concern themselves with what the chargebacks are going to be - we manage the chargebacks for them.

"Now here we are, 10 years later, with the AT&T 900 division closing up at the end of [2002]; MCI currently having problems with bankruptcy and not paying for several months on the 900 payouts; the ability to bill and collect on 900 is an ongoing problem, whereas American TelNet has been functioning for 10 years. The reason why we've been able to avoid what all the other billing companies have not is we have a centralized database. We're able to manage 900 callers, to limit the ones who don't pay, and to allow the risk-worthy ones service because they do pay."

This is part of TelNet's management formula, which for the most part minimizes the impact of regular chargebacks by monitoring and keeping a database of credit abusers.

"It's no different than the credit card companies, which are having problems right now because they're trying to limit the chargebacks, the credits and the bad debt overall. It's very important in processing credit cards and 900 calls: You have to have a database in place in order to manage it," Pardes says.

"[These carriers] have always allowed their customers to do that [management]. They didn't pay much attention. And with much of the traffic that has developed recently, which is, I must admit, very high chargeback (this might have been driven by bad traffic, it might have been driven by bad advertising) - without a centralized data base, you have no way to filter out the bad traffic from the good traffic; then you depend on other people to take care of this, and they don't; then you have the clear mismanagement that produces bad results and bankruptcy."

Pardes points to our neighbors to the North as 900-number billing pioneers. "[The Canadian phone companies] have been using 900 service for five years now. They have not had a problem. The chargebacks are maintained by the company, not the individual customers; therefore, [companies] are able to filter out the bad accounts and they've limited chargebacks to less than 20 percent - dramatically low when billing on a phone bill.

"We've formed a division to build Internet content. This means we provide a platform where a 900 number can be used at a Webmaster's site as another choice for the end user to elect to pay. We're adding another layer to the ability to bill. The customer now has credit cards, checks, and a phone bill through a 900 number.

"This is an opportunity for Webmasters and processors to increase business, because as we see it we're just providing another way for a customer to do business; that means incremental business, and that means more business. It's a win/win."

It also opens up opportunities for more overseas commerce, as international surfers are not nearly as credit-card dependent as their American counterparts. Paying via a phone bill is the European norm.

"Anyone who comes to us for Internet billing, we can manage them in such a way that we can give them good collectibility, because of the risk management that's built into our services. There's our reliability. We're probably one of the oldest regional vendors out there. We've retained valuable relationships with all the phone companies across the country for the past 10 years. Now we're broadening our concept of the use of this billing platform to include the Internet at large.

"Now a customer can go to an Internet site and elect to have the same service [provided by 900-number billing]." With credit card restrictions getting more and more intense, 900 numbers may become more than just another "choice."

"Nobody can predict the future of credit cards on the Internet. It's very shaky. We're providing another option.

"The difference American TelNet provides," continues Pardes, "begins with a highly-skilled, intelligent staff who have been with us, in the majority, from day one. A large percentage of our employees have been with the company eight years or more. They've been part of the development of the technology. We have very capable people managing that aspect of the business; so our employees are invaluable to the way we provide service because they're very dedicated.

"Also, our core competence - we began with a concept 10 years ago that we've stayed true to while all these other big name companies have come and gone. We control our own destiny with our billing contracts; early on we developed the risk-management strategy. That makes us a perfect model.

"That's why American TelNet continues to be a leader, continues to fulfill our customers' expectations, and deliver on service."

Pardes invites those who wish to find out more to contact Mary Pappas, ph. 800.767.2002 e. [email protected].