FTC Ends Deceptive Prepaid Calling Card Scheme Targeting Immigrants18 Jul, 2012 By: Doug McPherson
WASHINGTON – The Federal Trade Commission (FTC) stopped advertising from a prepaid phone card company – DR Phone Communications – that allegedly lied about the number of minutes cards actually provided and failed to divulge additional fees.
The FTC bought and tested 169 of the company’s cards and alleged none of the delivered the number of minutes advertised. The worst performing card gave less than one percent of the advertised minutes. The FTC charged the company's actions violate federal law and also named the company's website, drphonecom.com, and David Rosenthal as defendants.
The company has agreed to temporarily stop its claims before a trial where the FTC will reportedly seek to permanently halt the claims and force the company to give up profits made during the ad campaign.
The FTC has taken part in a series of ongoing efforts to stop deceptive marketing in the pre-paid calling card arena, which reportedly sells billions of dollars of cards annually – often to immigrants who use them to call friends and family in other countries.
The FTC claims this scheme targeted immigrants with brand names such as “Beautiful Asia,” “Vietnam Best” and “Pearls of Africa.” The cards were sold in convenience stores, groceries and kiosks and on DR Phone’s website.
The FTC said point-of-sale posters touted consumers could buy 70 minutes for $5 to call the Philippines, for example. Verbiage claimed, “No Fees,” “No Connection Fee” and “No Maintenance Fee.” But small print referenced fees without explanation of what those fees would be. One disclosure simply stated “International calls made to cellular phones and calls via toll-free numbers are billed at higher rate.” without adequately disclosing what those higher rates would be.