Deceptive marketing for prepaid calling cards targeting immigrants

Deceptive marketing for prepaid calling cards targeting immigrants »Play Video
There are dozens of pre-paid calling cards out there, and many give you exactly what they promise. But an ongoing investigation by the Federal Trade Commission finds some companies continue to hide the fact that most of your minutes could be eaten up in fees.

For millions of people, prepaid international calling cards are the answer for staying in contact with friends and family overseas. Calling card companies promote a large number of minutes for mere dollars and no connection fees.

But as Osama Elshamma discovered when calling Egypt, some cards have hidden fees that rapidly eat up the minutes you plan to use. Elshamma says he lost valuable minutes he paid for when the customer service line dropped in the middle of making a connection.

"The $2 is supposed to get me up to thirty minutes," Elshamma said. "But in reality it's down to about 13 minutes, 18 minutes, by the time we make the connections."

Johnny Kulvanish says he got short-changed by a prepaid card when he called relatives in Thailand.

"When you use it, you never get the same thing. You never get the same minutes," Kulvanish said.

As part of it's onging crackdown on deceptive pre-paid calling card sales practices, FTC investigators purchased and tested 169 prepaid calling cards sold by a company called DR Phone Communications. According to the feds, 100 percent of the DR Phone cards failed to deliver the minutes advertised."

Regional FTC Director Bob Schroeder says the calling card scheme specifically targets immigrants. In the DR Phone case, the prepaid calling cards delivered only 40 percent of the minutes advertised.

"What we're finding is fairly extensive misrepresentations to get people to buy the cards. So a lot of the cards are not providing the minutes that people think they're getting," said Schroeder.

Shroeder agrees with Elshamma's advice: It may sound like a great deal but never spend a large amount of money on pre-paid calling cards from a company you've never heard of nor dealt with before. Start with the cheapest card the company offers, $5 or less.

"See if the claims they make, the minutes they say 5 dollars will buy you, are actually factual, that it's truthful," said Elshamma.

Elshamma said you also need to pay close attention to the expiration dates. Some prepaid calling card dates expire before you can used up the minutes you paid for.

As part of the crackdown, DR Phone Communications agreed to temporarily stop the alleged misleading claims. The FTC is going to trial in an effort to force DR Phone to give back it's ill-gotten profits.