Photo: Warning to Latinos about Prepaid Calling Cards
Consider the following facts: Latinos may be losing up to $1 million per day because of fraudulent prepaid calling cards. The average calling card only delivers 60% of the minutes advertised. The cost-per-minute rates for prepaid phone cards can be up to 87% higher than expected. In response the National Hispanic Media Coalition has issued a consumer alert.
In response to these incredible facts, the US government is starting to take a serious look at this industry. Last week, the Federal Communications Commission (FCC) announced that it had found four prepaid calling card companies liable for $20 million in fines for “using deceptive marketing practices to sell prepaid calling cards, scamming consumers out of millions of dollars, mostly from low-income and minority communities.”
Through its investigation, the FCC found that many of the calling cards offered could only be used for a fraction of the minutes advertised, mostly due to excessive, hidden fees. Many of these companies targeted Spanish-speaking immigrants by promising low cost calling options to a number of countries in Central and South America and the Caribbean.
Earlier this year, The Federal Trade Commission (FTC) launched a similar legal action against another pre-paid calling card company after it found that 98% of its calling cards failed to deliver the number of minutes advertised.
The following companies and products were found to be engaged in fraudulent practices (NOTE: In some cases these companies market hundreds of different products. The products listed are a sample of the types of products impacted):
Touch-Tel USA, LLC
Calling Cards: Puro Central America, Puro Mexico, Ahora, La Pelota
Lyca Tel, LLC
Calling Cards: Director, Latino Calendar, Africa Target, Africa Calendar
Calling Cards: UNI, CallPlus, Go, Hey, my Friend, Geo
Epana Networks, Inc, also known as STi Telecom
Calling Cards: Organizacion Mundial de Adictos Al Futbol (O.M.A.F), la Cruda, el Chavo, el Gorrion
Millennium Telecard, Inc. otherwise known as Millenium Tele Card, LLC, Coleccion Latina, Inc., or Telecard Center USA, Inc.
The FCC recommends that consumers consider the following before purchasing any prepaid calling card:
* Make sure you understand the instructions on how to use the card
* Make sure you understand the rates for your particular phone card
* Read the fine print to understand any conditions or limitations on the card
* Check whether the advertised minutes of the card apply only to a single call or over the course of multiple calls
* Check the expiration date to avoid losing unused minutes
* Look for a toll-free customer service number provided with or on the card
* Ask your friends and family to recommend cards they have used and liked
Also, consider starting by buying a calling card of a lower denomination, $2 for example, to see if the calling card is reliable.
The FTC has also provided a list of common fees that can eat away at your minutes, such as:
* “Post-Call,” “Disconnect” or “Hang-Up” fees: charges deducted each time you hang up the phone after using the card.
* “Maintenance” fees: charges deducted shortly after you use the card and at regular intervals.
* “Pay phone surcharges”: charges deducted if you use the card at a pay phone.