Scam: Prepaid Phone Cards Deliver About Half The Minutes Promised

MSNBC says that a recent study by the FTC showed that on average, prepaid long distance phone cards only delivered about half of the minutes advertised.

Earlier this year, the FTC charged two major calling card distributors with cheating customers. In its lawsuits, the commission claims these firms charge hidden fees and make false statements about the number of minutes customers would receive.

During its investigation, the FTC bought and used dozens of calling cards from these two firms. None of the cards provided the number of minutes promised. On average, they delivered about half the minutes advertised. But in some cases it was much worse. A 360-minute card to Panama gave only 23 minutes of calling time.

In case you think this is no big deal — consider the fact that Americans spent $4 billion on prepaid phone cards in 2007. So how are they getting away with it? A combination of undisclosed fees and misleading advertising — the usual suspects.

Customers are charged connection fees, special fees for using a payphone, minutes are deducted for calls that did not connect and minutes are rounded up by three or four. Yuck.

Prepaid phone card industry under attack [MSNBC] (Thanks, Robert!)
(Photo: Tengaport )