FTC Says Calling Card Operation Only Delivers Fraction Of Promised Minutes

Back in May, our cohorts at Consumer Reports found that calling cards — especially those aimed at immigrants and intended for making international calls — were often loaded with fees and didn’t always deliver on the minutes they promised. Now, the folks at the Federal Trade Commission have taken action against the operators of one particular calling card that only provided an average of 40% of the promised minutes — and sometimes only a fraction of that.

As part of its investigation into deceptive calling card practices, the FTC purchased and tested 169 different cards from DR Phone, which sells billions of dollars of cards aimed at the international calling market. Not a single one of those cards — with brands like “Beautiful Asia,” “Vietnam Best,” and “Pearls of Africa” — delivered anywhere close to the advertised number of minutes.

On average, users were able to get 40.42% of the advertised minutes from each card. The worst-performing card only delivered less than 1% of the promised minutes.

The cards are advertised with point-of-sale posters that make claims like “Philippines 70 min-per $5” in large type, along with declarations like “No Fees,” “No Connection Fee,” and “No Maintenance Fee.”

The FTC says that even though there is small print at the bottom of the posters, it only makes vague reference to fees associated with the cards and does not adequately disclose what those fees would be. For example, one poster states, “International calls made to cellular phones and calls via toll free numbers are billed at higher rate,” but without disclosing what that rate might be.

The company has agreed to stop making the allegedly deceptive advertising pending a trial. However, the company’s website is still up and running and apparently selling these same cards. We’ve asked the FTC why the DR Phone website is allowed to continue operating and will update if we receive a response.