The Hispanic Institute has conducted an independent study of calling cards. Its purpose is to determine if calls to certain destinations using commercially available prepaid calling cards are providing the amount of minutes specified by the card providers.
Calling Card Fraud
The Hispanic Institute has learned that a wide-spread fraud is being perpetrated against Hispanics. A large number of companies that sell prepaid phone cards are systematically short-changing customers. The cards and voice-prompts falsely advertise a larger number of minutes than they actually deliver.
We've tested a number of these calling cards ourselves. On average, they deliver only 60% of the minutes they advertise.
THI Praises FTC for Standing Against Calling Card Fraud
WASHINGTON (March 31, 2008) -- Hispanic Institute President Gus West praised the Federal Trade Commission for standing against the fraudulent practices of certain major calling-card companies.
“It’s great news for consumers, particularly Hispanics, that the FTC is holding fraudulent phone-card companies accountable,” said West. “I commend this move and hope that this is the beginning of the end for fraudsters in the industry.”
According to West, the typical calling-card scam involves deceptive advertising, publicizing a certain number of minutes but delivering far fewer. West says Hispanics, including many low-income immigrants, are hit particularly hard.
“Our studies have revealed that the average calling card delivers only 60% of the minutes promised,” West explained. “Consumers can lose up to a million dollars a day because of fraudulent phone cards.”
Prepaid phone cards have grown into a $4 billion industry, responsible for 11 billion calls in 2004.
“I’m glad to see that the FTC has taken action on this issue of great importance to Hispanics and Americans of all stripes. Lawmakers around the country should follow the FTC’s lead in protecting consumers,” West said.
FTC Asks Court To Halt Calling Card Scam
The Federal Trade Commission has asked a U.S. district court judge to order a halt to the alleged illegal practices of CTA, a major distributor of prepaid calling cards across the country. In the last quarter of 2007 alone, CTA’s revenue from the sale of cards exceeded $28 million. The FTC charges that CTA misrepresents the number of calling minutes consumers get, fails to disclose that consumers’ cards will be charged whether or not the calls go through, and charges hidden fees.
Talk Isn't So Cheap on a Phone Card
For many immigrants, prepaid phone cards are the main connection to home cities and villages across Latin America and the world. But it practically goes without saying, according to users, that the cards don't deliver what they promise.
"The number of minutes the card tells you that you have, you get half of that," says Alma Hernandez, 22, a native Mexican who works at a taco stand in the Plaza Fiesta, an Atlanta mall popular with Latinos. "It's what everybody thinks."
McCollum probes calling card deceptions
Does time seem to fly a little too fast when you're using a prepaid calling card?
Florida Attorney General Bill McCollum's office is investigating whether companies that sell the cards are, in fact, cheating consumers of valuable minutes through fraud or deceptive advertising.
McCollum has asked 10 companies -- including some of the country's largest, and four in South Florida -- to turn over information related to the marketing campaigns of minutes offered for various calling cards. Of particular interest are ads and information targeting consumers who don't speak English.
Investigan a compañías de tarjetas telefónicas
Diez compañías de la industria de tarjetas telefónicas prepagadas que ofrecen el
servicio e llamadas locales y larga distancia, comenzaron a ser investigadas por
la Fiscalía eneral del Estado bajo sospechas de fraude y publicidad
Las pesquisas se concentrarán en alegaciones de consumidores insatisfechos, quienes firman que inmediatamente después de que se hace la primera llamada los proveedores empiezan a ''deducir'' una serie de cargos ocultos como servicios por conexión, llamadas
inconclusas que dan tono de ocupado, impuestos y mantenimiento que no se divulgan en las condiciones de uso de las tarjetas.
Scam takes aim at vulnerable immigrants
Just a few days ago, Florida Attorney General Bill McCollum announced he would begin investigating allegations of fraud in a $4 billion industry. This isn't some backroom corporate scandal under the microscope. It's a nation-wide scam ripping off many of America's most vulnerable residents - recent immigrants.
What's the big-money scandal? Fraudulent international phone cards. And there's reason to believe that shady dealings in these prepaid cards are widespread. McCollum's foray is welcome, because low-income and immigrant communities have been shaken down by this scam for far too long.
Estafas mediante tarjetas telefónicas
El debate sobre inmigración enciende pasiones encontradas en todos los rincones de la arena política.
Pero, con tanto hablar de trabajadores indocumentados, control de la frontera y asimilación, es fácil perder de vista un asunto que es mucho más importante para los más recientes residentes de Estados Unidos: el hecho de que la población inmigrante es un blanco fácil para los estafadores.
FTC's Identity Theft Site