US telecoms regulator the Federal Communications Commission (FCC) has announced that it has found four pre-paid calling card companies liable for USD20 million in fines for violating the Communications Act by using deceptive marketing practices to sell pre-paid calling cards to low-income and minority communities; the watchdog has proposed USD5 million in forfeitures each for STi Telecom (formerly Epana Networks), Lyca Tel, Touch-Tel USA and Locus Telecommunications. The guilty parties predominantly offer cut-price pre-paid tariffs to Mexico, Central and South America and the Caribbean. FCC Enforcement Bureau chief Michele Ellison commented: ‘Every day, people many of them from our most vulnerable communities rely on pre-paid calling cards to connect with friends and family around the world. The orders released today detail the misleading practices – from illegible fine print to impossible-to-calculate fees that some companies appear to use to sell their cards. We hope that these cases lead all pre-paid card providers to re-examine their marketing practices to ensure that they are treating consumers fairly’.
Elsewhere, the National Hispanic Media Coalition (NHMC) reports that Latinos may be losing up to USD1 million per day because of the fraudulent pre-paid cards. The average calling card, it says, only delivers 60% of the minutes advertised, whilst the cost-per-minute rates for pre-paid cards can be up to 87% higher than expected.