FTC: Prepaid cards shortchange on minutes

Hot Weather(Updated 12:18 p.m.)

The Federal Trade Commission is cracking down on companies that pitch prepaid phone cards but don’t deliver the advertised minutes because of hidden charges.

The latest target is DR Phone Communications, which advertises prepaid cards used by consumers making calls overseas. Some of the cards, which can be found convenience stores, grocery stores and kiosks, are marketed under names such as “Beautiful Asia,” “Vietnam Best” and “Pearls of Africa.”

The FTC said it purchased 169 of DR Phone’s card and all of them failed to deliver the number of minutes advertised. The agency said the cards on average delivered around 40 percent of the advertised minutes.

Efforts were being made to reach DR Phone and David Rosenthal, who is also mentioned in the complaint, for comment.

While large letters at the top of posters advertising the cards say “No Fees, “No Connection Fee” and “No Maintenance Fee”, the small print at the bottom makes what the FTC calls “vague reference” to fees without disclosing specifics. Sometimes the wording simply says, “International calls made to cellular phones and calls via toll free numbers are billed at higher rate,” the agency said.

DR Phone, which also operates under the name Drphonecom.com,was ordered to halt the alleged illegal practices, which the FTC says violates federal law, until the case is decided in court.

The prepaid phone industry also is trying to address concerns. The American PrePaid Phonecall Association said Wednesday it is finalizing new standards for prepaid phone card providers to make sure all fees and contract terms are disclosed.

“We are adopting this week our first draft of a set of standards that will prevent the kind of marketing that is alleged in [the DR Phone] lawsuit,” said APPPA Chairman Gustavo M. de la Garza.

In February, Millennium Telecard and its affiliates agreed to pay $2.32 million to settle FTC charges that it made false claims to consumers about the number of minutes of talk time their prepaid calling cards would deliver.

The agency advises consumers to do their homework when considering prepaid phone cards. Here is a link to valuable tips.

16 comments Add your comment

greg

July 10th, 2012
5:54 pm

Is there not one honest company in the US?

Allman

July 10th, 2012
6:03 pm

lkjlkj

July 10th, 2012
6:14 pm

This is why I don’t understand why the hard right object to regulation. It’s needed — we see constantly that companies do everything they can to skirt the law, to undermine what little consumer protections we have left, & to kill real competition.

I’ve noticed any time a politician crows about the ‘free market,’ you can bet he’s doing whatever he can to kill it for his favored interests. It’s kinda like those who are most vocal about gay ‘rights’ — always the closeted homos.

YOyo

July 10th, 2012
6:17 pm

The cards are from China.lol

argh man

July 10th, 2012
6:21 pm

Republicans can blast regulation all day long, but without it, companies are allowed to lie, cheat and steal from the American public and go unpunished for it.

J C

July 10th, 2012
7:50 pm

Go with Tracfone they are outstanding!

VISA PrePaid just as bad

July 10th, 2012
8:21 pm

My daughter received a Visa PrePaid gift card for her birthday for $25. She didn’t spend it right away and saved up her money for a few months to contribute to an Iphone. When she went to use the gift card, it has a $10 balance. An inquiry to Visa showed a $2.50/month “maintenance fee”, with the first charge taking place the say after it was purchased (so $25 card worth $22.50 the next morning!). My reaction: I’ll never use VISA again. My accounts remain open but the cards is in 3 pieces. F’in Idiots!

RGB

July 10th, 2012
9:20 pm

Yes, that’s why we NEED the government to help us with the decisions that we are just unable to make for ourselves. Why, if it weren’t for the government, we would all be ships adrift, subject to the vagaries of the 1% who would take advantage of us.

[Just thought I'd throw you libs a bone this evening. Even knuckleheads need a break from time-to-time.]

RGB

July 10th, 2012
9:31 pm

Here’s an article that “argh man” and others of his ilk should read. In short, it’s the story of a REPUBLICAN who is giving away $1.5 billion dollars to charities of his own choosing.

[Libs are thinking "how could someone make that decision for himself?"]

Here’s the link: http://blogs.ajc.com/business-beat/2010/10/05/bernie-marcus-on-giving-away-money-writing-a-book-leading-a-company/

And if you libs knew anything–I mean even the slightest scintilla–about business, you’d know that Bernie Marcus said that Home Depot could never have been started in the era of Sarbanes-Oxley (that’s a regulation you libs loooove to cite as crucial to the protection of US citizens even though not a single company was prosecuted under the law in its first 5 years of existence. I gave up tracking it after that….).

As information, the Home Depot employs 331,000 people–who never would have had the chance if you had your way. And that doesn’t factor in all the suppliers and customers who benefit.

If liberals had any shame, they would hide in a corner, silent, begging for absolution.

Unfortunately, they have no shame–and no regard for America.

Separately, read the stories of Denise Rich (a wealthy liberal whose husband’s pardon was recommended by out Attorney Criminal Holder) and a founder of Facebook (another lib revered by the liberati) who renounced their US citizenship so they wouldn’t have to pay taxes.

Sorry to confuse you leftists with, uh, facts.

ramguy68

July 10th, 2012
9:41 pm

It’s like the song in the old Billy Jack movie.Go ahead and hate your neighbor go ahead and cheat a friend, Do it in the name of Heaven you can justify it in the end. I have used some of the those cards to call Israel. I’m supposed to get 128 mins for $5 but it ends up being more like 50 mins if I am lucky. It’s all bull and they know it. Where do these people who run these companies and the ones that are dishonest come from? What rock did they crawl out from under?

morn

July 10th, 2012
9:57 pm

conservatives wouldnt know a fact of it bit them on the behind. They make facts up to fit their small minds, just look at their blind faith in the KJV if you don’t believe me. You can’t fix stupid republicans or tea bags

Home Depot

July 10th, 2012
10:18 pm

Imports more CHINESE goods than any other company other than WalMart. I wonder how many AMERICAN manufacturing jobs they killed as they demanded lower and lower prices?

RGB

July 10th, 2012
10:47 pm

Statists such as “morn” (someone needs to morn for you) relish any opportunity to take a shot a God. And it doesn’t have to be KJV, why NASB or NIV or others will do just fine, thank you.

Speaking of KJV, bet you didn’t know that the US Congress was the first entity to officially publish the King James Version of the Bible in the United States. Congress said that it would be a neat edition for the use in the public schools. Further, 29 of the 59 signers of the Declaration of Independence held seminary degrees. So the Founders of America had faith in the inspired Word of God (even if you don’t).

So, in contrast to your post, THERE are some facts!!

RGB

July 10th, 2012
10:51 pm

“Home Depot”:

Would help you with this if I had time–but Google theory of “comparative advantage” if you really want to learn something. If you don’t, that’s on you. But there are sound reasons not to foolishly insist that everything must be made in America.

Reason #1: Americans would be worse off.

Are you a union member?

Harry Hippie

July 11th, 2012
1:38 am

Rosenthal? Is that a German last name?

Bunnie

July 11th, 2012
7:24 am

I send a complaint to the FTC about iWireless which you can buy at Kroger who does this same exact thing. It’s even worse if you sign up for a “plan” because they’ll take half your card minutes to pay fees they aren’t supposed to take. If you call to complain they treat you like you’re stupid and claim you made a mistake.