Avoid these Prepaid Calling Cards, FTC says
The Hispanic Institute applauded the Federal Trade Commission's recent move to halt sales of fraudulent phone cards distributed by several major calling card companies.
THI President Gus West says, "Hispanics have been an unwitting target for unscrupulous calling-card firms. We at the Hispanic Institute applaud the FTC for acting on behalf of consumers and call on other leaders to do so as well."
At the request of the FTC, a U.S. District Court ordered a temporary halt to the deceptive advertising claims used to promote prepaid phone card. The agency accused marketers of misrepresenting the number of calling minutes consumers will get on their cards and fail to adequately disclose fees that will reduce the value of the cards.
Defendents in the case are: Alternatel, Inc.; G.F.G. Enterprises, LLC, also d/b/a Mystic Prepaid; Voice Prepaid, Inc.; Voice Distributors, Inc.; Telecom Express, Inc.; and their principals.
The FTC said the companies marketed their prepaid calling cards through small retailers such as newsstands, kiosks, grocery and convenience stores, and over the Internet. The cards, which sell for between $2 and $10, are marketed under a wide variety of names, including “Aló Mamá,” “Coffee Time,” “Rey de Florida,” “Tree Monkey,” and “Voz do Brasil.”
Using posters for advertising, as well as radio, television and newspapers foreign language ads, the companies made bold claims about the number of minutes the cards would provide for calls to various international locations, including Argentina, Brazil, Colombia, Cuba, El Salvador, Guatemala, Haiti, Mexico, and Nigeria.
But the FTC said that consumers did not receive the number of minutes advertised. For instance, one calling card offering 360 minutes to Panama, only delivered 23 minutes of calling time. In fact, the FTC said that in 87 tests of the defendants’ cards, the cards delivered an average of only 50 percent of the advertised minutes.
The FTC also said the cards carried hidden fees. While the ads for their cards often boasted that there are “no connection fees,” they failed to clearly disclose there are other random fees, such as “hang-up” and “maintenance” fees and “destination surcharges” that can wipe out the value of the card after even one short call. Such fees are disclosed in tiny font and in vague terms that are mostly incomprehensible in any language. (Gotta love that mouseprint, huh?)
Good job FTC and THI for alerting consumers to the rip-off.
(AP Photo)
A native of Vietnam, 