Six Companies To Pay $30M Over Deceptive Prepaid Calling Card Ads
With mobile phones and carrier long distance plans, the average consumer might not have much need for a calling card. But that doesn’t mean companies offering such products are exempt from scrutiny from federal regulators. As such, the Federal Communications Commission today announced a $30 million settlement with six companies over deceptive marking of prepaid calling cards.
The FCC announced today that it fined six companies for deceptively advertising low-cost prepaid calling card that could allow customers far more calling minutes than were actually available.
Locus Telecommunications, Inc.; Lyca Tel, LLC; NobelTel, LLC; Simple Network, Inc.; STi Telecom Inc.; and Touch-Tel USA, LLC will each pay $5 million for deceptively marketing prepaid calling cards to consumers.
According to the FCC action, the companies targeted advertising to immigrant consumers promising that the prepaid calling cards, which cost between $2 and $5, could be used for hundreds or thousands of minutes in international phone calls.
In reality, the consumers only paid for the ability to use only a fraction of the promised minutes due to the companies’ assessment of multiple fees and surcharges that were not clearly and conspicuously disclosed to consumers.
“Consumers should not have to comb through small print and contradictory disclosures to learn that the bold promises made in advertisements are false and misleading,” Travis LeBlanc, Chief of the FCC Enforcement Bureau, said in a statement. “Companies that use deceptive tactics to betray consumer trust should expect to face stiff penalties.”
The FCC action came about after an investigation into marketing materials by the six companies.
“The disclosures did not clearly and conspicuously disclose or explain the actual charges that would be incurred for a call and that those charges were subject to change by the companies, often without any notice to consumers,” the FCC states.
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