Legislation Would Protect Consumers From Fraud; Next Vote To Be Before The Full House

Washington, DC--Congressman Eliot Engel’s legislation to protect buyers of telephone calling cards from unscrupulous companies, passed unanimously today in the House Energy and Commerce Committee. The bill will next be voted on before the full House of Representatives. Remarks made by Rep. Engel can be viewed here - http://www.youtube.com/watch?v=vj0j2F6vhrw

The Calling Card Consumer Protection Act (H.R. 3993), would protect users of telephone calling cards, who studies show, often get only 60 percent of the minutes advertised on the calling cards they purchase.

“I am very pleased to see the committee recommend this important bill for a vote by the full House. Calling cards are an invaluable resource for people without long distance telephone, or those who make frequent overseas calls. Students, military, those with family abroad, and others who cannot afford long distance service can save a great deal of money with the cards,” said Rep. Engel, a senior member of the House Energy & Commerce committee.

“However, these calling cards can also lead to unsavory business practices when companies fail to keep their advertised terms. I learned of these fraudulent practices after hearing numerous complaints from constituents whose cards did not provide the number of minutes advertised. Calling card fraud harms those who are among the most vulnerable; poor, minority, and immigrant populations as well as our military serving overseas,” added the 11-term Congressman.

Rep. Engel identified a past Business Week article which told the story of a company who marketed their cards to Spanish-speaking consumers, with Spanish language packaging, but with fine print in English. When confronted, the company said “we’re in America.” However, they had no issues using Spanish to market this product, just not to educate consumers on what they had to pay in fees.

H.R. 3993 would do the following:

• Outlaw advertising for a certain number of minutes on a prepaid card, and failing to provide them.
• Require disclosure of all terms and conditions clearly on the card, packaging and advertising, in the language in which the card is advertised.
• Authorize the Federal Trade Commission to require a chart, similar to nutrition labeling, on the cards and advertisements clearly stating all the fees of the card.

A companion bill (S.562) is sponsored in the Senate by Senator Bill Nelson (D-FL).