Facts & Figures

Syndicate

Gregorio Rubio College Fund
c/o: The Hispanic Institute,
906 Pennsylvania Avenue, S.E.,
Washington, D.C. 20003

13.6 million people immigrated to the U.S. in the 1990s, accounting for 41% of the growth in the U.S. labor force. Between 2000 and 2003, immigrants accounted for 60% of labor force growth.
Many immigrants subsist on low incomes.

In 2002, 62% of recent Mexican immigrants earned less than twice the poverty level. 55% of Dominican immigrants, 37% of Italian immigrants, and 32% of Chinese immigrants similarly earned less than twice the poverty level.

Prepaid phone cards offer huge savings to new immigrants. International calls made with prepaid phone cards, on average, cost 18 to 64 percent less than calls made with landlines or wireless phones.

Conversely, international calls using 10-10 dial-around services cost 22% more, those using traditional long-distance plans cost 58% more, and those using wireless services cost 176% more -- or almost three times as much.
For example, phone service can cost as much as $1.32/minute for calls to Mexico.
This can mean savings of $1 to $11 per call, or up to $44/month. (assuming four 30-minute calls per month)

Immigrants also use calling cards because – especially for those who don't have a Social Security number – it can be difficult for them to get a phone line.
Prepaid phone cards generally assess maintenance, connection, or other fees in completing calls.

For example, a five-minute call may be catalogued as a ten-minute call, with the additional five-minutes taken out as a fee.
Sometimes these fees are disclosed in the fine print, sometimes they aren't disclosed at all, according to a 2005 study by Julia Marlowe, and associate professor emerita at the University of Georgia.

Generally speaking, a prepaid card only delivers all the minutes advertised when it is used for one call.

As prepaid phone cards have grown in popularity, the volume of international calls has risen from 200 million in 1980 to 11 billion in 2004.

Fraud has become prevalent with these prepaid phone cards. Most cards deliver just 60 percent of the amount advertised.

Fraudulent phone cards swindle Hispanics out of close to $1 million each day.
Here's how the scam often works: Because the deceitful phone card vendors deliver only a fraction of the minutes that they've been paid for, they're able to "kick back" higher commissions, incentivizing vendors to sell more of those fraudulent cards.
A court decision from the U.S. District Court for the District of New Jersey sympathized with those defrauded in this matter, but unfortunately these schemes will continue to take root unless Congress and state attorneys general act.
Only 11 states currently have laws on calling cards. Most turn to generic consumer protection statutes, but enforcement has been extremely light.
According to a 7/23/07 BusinessWeek article, Three companies have already settled in NJ federal court after they were challenged by competitor IDT Corp. The companies that settled are Epana Networks, Dollar Phone, and Locus Telecommunications. Six other companies (such as CVT Prepaid Solutions) have not settled.