Washington, D.C.--Congressman Eliot Engel’s (D-NY) legislation, to protect buyers of telephone calling cards from unscrupulous companies who deliver fewer minutes than promised, was presented Thursday at a hearing of the House Energy and Commerce Committee’s Subcommittee on Commerce, Trade and Consumer Protection.

His bill, the Calling Card Consumer Protection Act (H.R. 3993), would protect users of telephone calling cards, who studies show, often only get 60 percent of the minutes advertised on the calling cards they purchase. To view his remarks - http://www.youtube.com/watch?v=1Y32_BRM4uA

“Calling cards are an invaluable resource for people without long distance telephone service in their home, or those who make frequent overseas calls. Common users are students, members of the Armed Forces, those who have family living outside of the United States, and those who either choose not to subscribe to long distance telephone service, or who cannot afford it. Calling cards, which provide the services advertised, can save consumers a great deal of money when they call overseas,” said Rep. Engel.

“However, these calling cards can also lead to unsavory business practices when companies fail to keep their advertised terms. About three years ago, I began hearing from a number of constituents whose cards did not provide the number of minutes advertised. Furthermore, when attempting to contact the calling card company, they found it difficult or impossible to reach a customer service line.”

Rep. Engel purchased a calling card himself in order to experience these issues first hand. He experienced the exact same problems. A study by the Hispanic Institute found that callers only received an average of 60 percent of the minutes “guaranteed” by the card. The prepaid calling card industry takes in $4 billion a year in revenue.

Rep. Engel said, “If the cards are only providing 60 percent of the minutes, you can do the unfavorable math. Companies have instituted a variety of hidden fees that reduce the amount of minutes. Some cards deduct minutes even if the call is not connected. Other cards cut off the call after a few minutes so the consumer must redial and be subjected to another connection charge. Some cards round up the number of minutes used in four-minute increments. Others advertise “no connection fees,” but then charge you a hang-up fee.”

The 11-term Congressman said, “Calling card fraud harms those who are among the most vulnerable; poor, minority, and immigrant populations as well as our military serving overseas.

H.R. 3993 would do the following:

• Outlaw advertising for a certain number of minutes on a prepaid card, and failing to provide them.
• Disclose all terms and conditions clearly labeled on the card, packaging and advertising, and, if necessary, also in the language the card is advertised in.
• Require vendors to place signs next to the card display clearly marking surcharges, terms and conditions.

The legislation would be subject to a potential markup in the subcommittee in the coming year.