Phone Card Advertising

Issue
Prepaid telephone calling cards are a useful way for many consumers to make long distance phone calls. However, some companies have been criticized for providing far fewer minutes than advertised; some studies suggest that card companies only provide 60 percent of minutes advertised.

AAF Position
The AAF supports the FTC’s efforts to combat deceptive advertising and believes the agency should have the enforcement tools needed to protect consumers from unscrupulous companies. We believe all fees should be clearly disclosed at the point of sale. However, we are concerned about the ability to provide full disclosure information in all advertisements as a matter of practicality. Additionally, we are concerned that the bill would place legitimate phone card providers under the dual jurisdiction of both the Federal Communications Commission and the FTC.

Legislation

H.R. 3402: Calling Card Consumer Protection Act. Introduced by Rep. Eliot Engel, D-N.Y., this bill passed the House of Representatives on September 25, 2008. The bill requires card providers to clearly describe all associated fees and limitations and provide a customer service provider. The Federal Trade Commission would be granted enforcement authority. The bill has been sent to the Senate but not yet voted on.

Last updated: Ocotber 2008

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