Reach out and Rob Someone

By Yoshikane, Akito | In These Times, December 2008 | Go to article overview
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Reach out and Rob Someone


Yoshikane, Akito, In These Times


HELIODORA VERA FREQUENTLY uses phone cards to call her family in Mexico, but she and many other customers often suspected they weren't getting all of the minutes they paid for. Now government and consumer studies back their suspicions.

Investigations by the Federal Trade Commission (FTC), several state attorney generals' offices and consumer advocacy groups have found that many calling card companies practice deceptive advertising and deduct calling minutes through hidden fees.

"The cards always end before the minutes that [are] stated on the cards," says Vera, a Spanish Harlem resident who frequently phones abroad to speak with her daughters. "It's bad because they're robbing us. They give us certain minutes to call and it's not true. They're stealing our minutes."

Prepaid phone cards are a $4 billion annual industry. Domestic and international prepaid cards are sold for $2 to $20 at convenience stores, gas stations and newsstands- each claming to offer the most minutes for the fewest dollars.

But two FTC studies conducted in March and May found that phone cards purchased from Alternatel Inc., a Florida company, delivered an average of 50 percent of the minutes advertised, while cards from New Jersey-based Clifton Telecard Alliance (CTA) delivered only 43 percent.

Many users had minutes subtracted when phone calls didn't connect, or when they got a busy signal. They also had hidden connection charges tacked on. And some cards simply didn't work.

What's more, disclosures were often in small, illegible print and included charges - such as "hang up," "maintenance fees" and "destination surcharges" - that reduced the cards' values.

"Such fees are disclosed in tiny font and in vague terms that are mostly incomprehensible in any language," the FTC said in a statement.

Calling card use has gone up in the United States, and it is projected to keep climbing. In 2000, 30 million households used calling cards. By 2005, the number had increased to 50 million, according to industry estimates.

According to Gus West, president of the Hispanic Institute, a nonprofit group, Latinos make up more than 70 percent of U.

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