FTC: Prepaid Calling Card Scheme Eyed Immigrants

The Federal Trade Commission said it has halted the deceptive advertising claims of a marketer of prepaid phone cards that targeted immigrant communities, pending a trial.
The phone cards were tested by the FTC and delivered only 40 percent of the minutes the company advertised.  The company also failed to disclose additional fees, the FTC said.
The FTC charged that DR Phone Communications preyed on immigrants. Using brand names such as “Beautiful Asia,” “Vietnam Best,” and “Pearls of Africa,” the cards were sold in convenience stores, groceries and kiosks across the country and on DR Phone’s website.
DR Phone agreed to temporarily stop its claims, pending a trial in which the FTC will seek to permanently halt the company’s marketing claims and force the operation to give up its financial gains.
The FTC bought and tested 169 of the company’s cards. The FTC’s complaint alleged that 100 percent of the tested cards failed to deliver the number of minutes advertised. The worst performing card delivered less than one percent of the advertised minutes. On average, the 169 cards delivered only 40.42 percent of the advertised time.
Small print at the bottom of the posters made “vague reference” to fees without properly disclosing the exact fees.
One disclosure simply stated: “International calls made to cellular phones and calls via toll free numbers are billed at higher rate.”

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