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House passes bill aimed at prepaid phone cards

Date: 9/25/2008 10:05:47 PM

The House on Thursday moved to force companies that sell or distribute prepaid calling cards to describe any fees associated with the cards on packaging and in advertising.

Declaring that the industry is plagued by fraudulent and deceptive business practices the legislation requires disclosure of all terms, conditions and fees. The measure passed on a voice vote.

The cards are typically sold in convenience stores and neighborhood markets. Buyers are promised a certain number of minutes for $2, $5 or $10. Providers have been criticized for providing fewer minutes than advertised.

Bill sponsor Rep. Eliot Engel, D-N.Y., says studies indicate some card companies provide only 60 percent of minutes promised.

Some calling cards deduct minutes when the call is not connected while others cut off calls after a few minutes so the consumer must redial and again be subjected to a connection charge.

This is just a good consumer protection bill, Engel said Thursday, prior to the vote. And it has to be federal because if you have a hodgepodge of states all with different laws, it really doesnt work. You really need something uniform.

Card providers often target immigrants who may use them to call relatives in their home countries. They are also used by U.S. soldiers stationed overseas and their families.

The bill requires card sellers to clearly describe any fees and limitations. It also requires the name of the service provider be displayed as well as a customer service telephone number.

The bill makes it unlawful for a service provider to supply fewer minutes than advertised. The legislation gives the Federal Trade Commission enforcement authority.

The Senate is considering a similar bill.

PCS Tags: Overseas Phone Card, Overseas Prepaid Phone Cards, Overseas Calling Cards, International Calling cards  Phone Card News Stats


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