Prepaid Calling Cards

Jul 23, 2012 by


Use with caution.

In May the FCC issued an “Enforcement Advisory” about prepaid calling cards. The gist: “Carefully Review Calling Card Advertisements Prior to Purchase — Many Prepaid Calling Cards Have “Fine Print” and Undisclosed Fees”.

Scammer Bonanza

The prepaid calling card business appears to attract scammers and crooks like a D.C. lobbyist’s cocktail party attracts Members of Congress. Targeting mainly immigrants who make lots of phone calls to overseas family and friends, prepaid calling cards can offer attractive calling rates compared to standard landline rates. But unless you buy with extreme care (and sometimes even if you do), there’s a good chance your prepaid calling card isn’t nearly as cheap as you think.

Consumer Reports Investigation of Prepaid Calling Cards

Consumer Reports hired secret shoppers to buy prepaid calling cards in 130 locations in New York State. Cards were purchased at many categories of retail outlets, including national chains. Some of Consumer Reports’ findings:

  • Three-quarters of the 130 cards bought did not disclose calling rates!
  • A maze of fees and surcharges makes fully understanding your true calling rate nearly impossible. Fees can deplete a card’s value before the first call is made.
  • One company from which CR bought two cards had gone out of business.
  • Phoning customer service at the prepaid calling card company JTI invariably led to this greeting: “Thank you. Good bye.”
  • A card CR purchased in January 2012 promoted a contest that ended two years ago!

Consumer Report says that “Generally, you get all the minutes claimed for a card only when you use it for a single call. Otherwise, the value of the cards can be eaten up in fees and surcharges instead of actual time spent calling friends and family.”

You can read CR’s report on its prepaid phone card investigation here.

FCC Prepaid Calling Card Enforcement Advisory

Here’s an excerpt from the FCC’s Enforcement Advisory on prepaid phone cards:

Many prepaid calling card providers target vulnerable low-income, minority, or immigrant communities, falsely claiming that calling cards costing just a few dollars will give the consumer hundreds, if not thousands, of minutes of calls to family and friends across the globe. In the last nine months, the Federal Communications Commission has taken aggressive enforcement action against some of these prepaid calling card companies, proposing $25 million in monetary forfeitures for deceptive advertising. The FCC’s investigations found that due to undisclosed fees and “fine print” consumers would get only a fraction of the advertised minutes. Unfortunately, some carriers appear to be continuing these misleading practices. This Advisory alerts prepaid calling card consumers and warns carriers that the FCC will diligently pursue violators.

The Advisory also recommends that consumers take these actions to avoid being ripped off:

  • Carefully read the instructions on how to use the card.
  • Understand the rates for your particular phone card.
  • Read the “fine print” to understand any fees, conditions, or limitations on the card.
  • Check to see if the advertised minutes apply only to a single call or to multiple calls.
  • Confirm the expiration date to avoid losing unused minutes.
  • Make sure there is a toll-free customer service number provided with or on the card.
  • Get referrals: ask your friends and family to recommend cards they have used and liked.

But according to Consumer Reports, the information consumers need to make an informed buying choice simply is not available. Since you don’t know what you don’t know, assuring you get what you think you’re getting when you buy a prepaid phone card seems impossible.

Have You Used a Prepaid Phone Card?

What’s your experience with prepaid phone cards? Did you feel you got what you paid for? Any tips to avoid getting cheated or surprised?

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