FTC Testifies on Prepaid Phone Card Fraud
FTC Testifies on Prepaid Phone Card Fraud
Source: Federal Trade Commission
The Federal Trade Commission today told the U.S. Senate Committee on Commerce, Science, and Transportation that while the FTC will continue its aggressive law enforcement and consumer education programs in the prepaid calling card arena, pending legislation would benefit consumers by providing “an additional remedy to those already available to the Commission.”
FTC Chairman William E. Kovacic told the Committee that the Commission has been bringing law enforcement actions involving deceptively marketed prepaid phone cards since the 1990s. “This spring, the FTC filed two cases against major distributors of prepaid calling cards.” The FTC alleged that the defendants marketed their cards to recent immigrants, misrepresented the number of calling minutes provided by their cards, and failed to disclose adequately fees and charges associated with their cards. The testimony notes that the FTC conducted tests on the cards before it filed the suits. In the first lawsuit, the cards delivered, on average, less than 43 percent of the advertised calling minutes. In the second suit, the cards delivered, on average, only 50.4 percent of the minutes advertised.
+ Prepared Statement (PDF; 76 KB) of the Federal Trade Commission On Prepaid Calling Cards, Presented by Chairman William E. Kovacic Before the Committee On Commerce, Science and Transportation, United States Senate
+ Buying Time: The Facts About Pre-Paid Phone Cards
