Legislation Would Prevent $1 Million From Consumer Fraud Every Day

Washington, DC--Congressman Eliot Engel’s (D-NY-17) legislation to protect buyers of telephone calling cards from unscrupulous companies passed the full House of Representatives today by an overwhelming margin of 381-41.   The bill will now be sent to the Senate for passage.  (Remarks made by Rep. Engel can be viewed here - http://www.youtube.com/watch?v=27-9k103-fw )

The Calling Card Consumer Protection Act (H.R. 3993), would protect buyers of telephone calling cards, who, according to one independent study, often get only 60 percent of the minutes advertised on the calling cards they purchase.

“This bill will put a stop to the deceptive practices of unscrupulous prepaid calling card providers, who have been costing consumers and the industry hundreds of millions of dollars each year in fraud.  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.

“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.

Many prepaid calling card companies fail to live up to their advertised commitments.  There have been numerous examples of companies using one or more of the following practices:

• Deducting minutes for unconnected calls
• Rounding up the minutes used in four minute increments
• Advertising “no connection fee” but charging a hidden “disconnect fee.”
• Marketing to non English speaking populations, but keeping the fine print in English

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).

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