|
previous article: FCC CITES FIRST NATIONAL BANK AND LYFT FOR TELEMARKETING VIOLATIONS
next article: Call 911, get an automated message to "hang up and dial 911"
FCC FINES SIX COMPANIES $30 MILLION FOR MISLEADING CONSUMERS OF PREPAID CALLING
CARDS
WASHINGTON, October 21, 2015 - The Federal Communications Commission has fined
six companies a combined $30 million for deceptively marketing prepaid calling
cards. The companies falsely advertised that their low-cost prepaid calling
cards could allow consumers far more calling minutes than were in fact being
sold.
"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," said Travis LeBlanc, Chief of the FCC Enforcement Bureau.
"Companies that use deceptive tactics to betray consumer trust should expect to
face stiff penalties."
Locus Telecommunications, Inc.; Lyca Tel, LLC; NobelTel, LLC; Simple Network,
Inc.; STi Telecom Inc.; and Touch-Tel USA, LLC were each fined $5 million for
deceptively marketing prepaid calling cards to consumers. The companies targeted
advertising to immigrant consumers promising that the prepaid calling cards,
which cost only a few dollars, could be used for hundreds or thousands of
minutes in international phone calls. In fact, for that price, the consumers
would be able 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.
Through the course of its investigation, the FCC's Enforcement Bureau reviewed
marketing materials and disclosures contained on multiple prepaid calling cards
and related advertising posters from the 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.
Prepaid calling cards are frequently marketed to immigrant communities for
calling a variety of international destinations. Such prepaid calling cards are
popular within immigrant communities to help them stay in touch with family and
friends in their home countries. The cards are typically sold in denominations
of $2, $3, and $5 at newsstands and in grocery and convenience stores. Companies
often market prepaid cards under a variety of brand names and advertise them to
consumers primarily using posters displayed in retail locations.
Today's fines, voted on by the full Commission, are the final step in the
Commission's investigation of the six companies. In 2011 and 2012, the
Enforcement Bureau issued Notices of Apparent Liability to each of these
companies for these deceptive practices.
For more information about the FCC's rules protecting consumers from fraud and
deception, see the FCC consumer guide "Prepaid Phone Cards: What Consumers
Should Know" available at: http://go.usa.gov/3e6ZP Consumer complaints can be
filed in both English and Spanish through the Commission's consumer help desk at
888-225-5322 and
www.fcc.gov/complaints
|