Prepaid calling card companies fined for false ads

A half-dozen companies were fined $30 million for deceptively marketing prepaid calling cards, the Federal Communications Commission said Wednesday.

The companies falsely advertised that their low-cost prepaid calling cards could allow consumers far more calling minutes than were in fact being sold, the federal agency said.

The cards, frequently marketed to immigrant communities for international calling, are typically sold in denominations of $2, $3, and $5 at newsstands and in grocery and convenience stores.

"Consumers should not have to comb through small print and contradictory disclosures to learn that the bold promises made in advertisements are false and misleading," said Travis LeBlanc, chief of the FCC Enforcement Bureau, in a statement. "Companies that use deceptive tactics to betray consumer trust should expect to face stiff penalties."

Companies including Locus Telecommunications, Lyca Tel, NobelTel, Simple Network, STi Telecom and Touch-Tel USA, LLC were each fined $5 million for deceptively marketing prepaid calling cards to consumers.

To learn more about phone cards, the FCC recommends: "Prepaid Phone Cards: What Consumers Should Know."

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    Mitch Lipka is an award-winning consumer columnist. He was in charge of consumer news for AOL's personal finance site and was a senior editor at Consumer Reports. He was also a reporter for The Philadelphia Inquirer and the South Florida Sun-Sentinel, among other publications.