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REP. ENGEL'S CALLING CARDS BILL WOULD PREVENT $1 MILLION IN CONSUMER FRAUD EVERY DAY

Washington, DC -- Congressman Eliot Engel’s (D-NY-17) legislation, the Calling Card Consumer Protection Act, would protect buyers of telephone calling cards, who often get only 60 percent of the minutes advertised on the calling cards they purchase.  The bill, introduced Thursday, was overwhelmingly passed the full House of Representatives in 2010, but failed to receive a vote in the Senate.  According to testimony presented to the House Energy and Commerce Committee in 2008, the Hispanic Institute claimed that Hispanic consumers may be losing up to $1 million per day because of fraudulent phone cards.

“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,” said Rep. Engel, a senior member of the House Energy & Commerce Committee. “Students, military, those with family abroad, and others who cannot afford long distance service can save a great deal of money with calling cards.  They are an invaluable resource for many people – especially those who make frequent overseas calls – and they should be able to make calls to their loved ones without fear of fraud

“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 12-term Congressman.

Many prepaid calling card companies fail to live up to their advertised commitments. One independent study found that on average, calling cards only provide 60% of the minutes advertised on the cards. 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

The bill would outlaw advertising for a certain number of minutes on a prepaid card, and failing to provide them.  It would also require disclosure of all terms and conditions clearly on the card, packaging and advertising, in the language in which the card is advertised. 

“I call on my colleagues in the House to bring the bill to the floor once again for passage.  It received bipartisan support in 2010, and it should receive it again.  I then urge the Senate to bring it to a vote, so we can send this common-sense, consumer protection bill to President Obama for his signature,” added Rep. Engel.

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