Prepaid Phone Card Bill Backed by FTC

The Federal Trade Commission (FTC) is urging Congress to approve legislation to protect consumers from abusive sales tactics when it comes to pre-paid phone cards, Consumer Affairs reports. The agency told the U.S. House Subcommittee on Commerce, Trade and Consumer Protection that a pending bill would be helpful to the FTC’s efforts in that area.

FTC Chairman William E. Kovacic told the committee that the Commission would continue to conduct consumer education programs and bring law enforcement actions involving deceptively marketed prepaid phone cards. In two cases filed this spring against major distributors of prepaid calling cards, the FTC alleged that the defendants marketed their cards to recent immigrants, misrepresented the number of calling minutes provided by their cards, and failed to disclose adequately fees and charges associated with their cards.

The FTC said it conducted tests on the cards before it filed the suits. In the first lawsuit, the cards delivered, on average, less than 43 percent of the advertised calling minutes. In the second suit, the cards delivered, on average, only 50.4 percent of the minutes advertised.