Calling Cards Come Under Federal Trade Commission Scrutiny

Think you're not getting all the minutes that you paid for on your calling card? Well, it's very possible that you're not. The Federal Trade Commission (FTC) is checking into just those issues, and some disturbing numbers have already come to light. The Hispanic Institute states that Hispanic consumers "may be losing up to $1 million per day because of fraudulent phone cards." The fraud comes from consumers not being able to use all the minutes they buy. A study commissioned by the Hispanic Institute found that prepaid calling card companies delivered only 60% of promised minutes. Now the FTC is being encouraged to intervene to help protect consumers, and Federal legislation is in the works to ensure that calling card companies deliver.

Prepaid Calling Cards: Hidden Fees Galore
Part of the issue for being able to use all the minutes concerns the numerous hidden fees that consumers have to pay. Below are breakdowns of hidden fees charged by one prepaid calling card company. This information is coming straight out of FTC testimony by the Executive Director of the National Consumers League, Sally Greenberg. She purchased a "Majestic DMV" card for $2.00, and these are the fees that she found:

• $.99 applies on day one and then every 5 days after
• A $.04/min charge can be applied to calls made through toll free access numbers
• A $.99 payphone surcharge applies
• $.10 to $.99 fee is charged for connected calls

There are actually more fees than this, but I wanted to give you a flavor of what's going on behind the scenes of many calls that you may make using a calling card. You can read more of Greenberg's testimony on this link.

What's Being Done to Regulate the Calling Card Industry?
Only 11 states even have laws pertaining to calling card fraud. Florida has already taken on the issue, and in some ways, it's really brought this issue to the foreground. In June 2008, Florida's Attorney General struck settlements with 10 phone card companies to stop deceptive tactics such as false advertising and hidden fees. However, there has yet to be broader Federal protection to help consumers in the entire U.S. Currently, S. 2998, the Prepaid Calling Card Consumer Protection Act of 2008, is under consideration to help protect people.

Take Action to Help Clean Up the Industry
For activists, you might want to check out GovIt.com, which monitors legislation. You can encourage your representatives to take action by submitting your vote for S. 2998. The site will then send your vote to your representatives to let them know how you feel about the bill.

And if you would like to take action by moving to another service that you can trust, sign up here for jaxtr. You can learn more about jaxtr on this link, and check out our rates on this link.

Feel free to let us know what you think about the legislation and what you think will happen.