Saturday, November 1, 2008

Phone Card Fraud: Are there any Honest Phone Cards?

A recent article published by MSNBC indicted that the phone card industry is plagued by fraud and other abuses. They cite a recent investigation by the Federal Trade Commission (FTC) and other consumer groups that found the “bad actors in this industry use false or misleading advertising and ding customers with all sorts of junk fees….” They went on to say that, some phone card companies charge hidden fees that are often only vaguely disclosed. These fees add to the advertised cost of making calls so many phone cards do not deliver the advertised minutes. In fact, in a testimony before Congress in September, the FTC Chairman, William E. Kovacic, reported that they had filed law suites against two major phone card distributors in the spring who had deceptively marketed their calling cards. The FTC alleged that the defendants did not adequately disclose fees and charges associated with their cards. In the first case, the phone cards on average only delivered 43% of the advertised minutes while in the second case the cards only delivered 50.4% of the minutes advertised.

MSNBC reports that Congress is also getting into the act. A new law called the Calling Card Protection Act passed the House last month and the Senate is now considering a similar bill.

We applaud these actions and feel it is about time the government has done something to regulate this industry. We have been trying to educate consumers on Phone Card hidden fees for the last 4 years. We have done this through numerous articles, blog entries and through tips on our websites like those found on the Phone Card Shop. Phone Card shopping is simply too complex for consumers right now due to all of the hidden fees associated with most calling cards. We feel there should be an industry standard that requires that all phone card distributors to include all applicable fees in their advertised per minute rates. In this way, potential customers can compare the cost of making calls with various phone cards on the same basis. The market is so confusing now that even experienced individuals in the industry have a trouble comparing rates between phone cards with different cost structures.

Are there Honest Phone Card Companies?

Yes, some phone cards and other prepaid calling products are honestly marketed today. We have been pointing these out to consumers for over 4 years. There are calling cards on the market that feature high quality and low or even no fees. Our phone card website, Smart Global Call Prepaid Phone Cards, contains a full range of international phone cards with honest rates, good quality and low fees. We know this because we have tested the cards we sell. We also have 100’s of customers that come back month after month to re-charge their phone cards. If they were being ripped-off they would not come back and make another purchase. We also tend to favor products like Tel3Advantage which we feel which we know is an honest product. Tel3Advantage is the only low cost product we know of that has no hidden fees. Consumers pay the advertised rates with Tel3Advatage. We have tested this over-and-over again over the past 4 years. Phone Cards like the AT&T Card or MCI are also honest but their per-minute rates are also high. We hope the phone card industry will soon have new regulations so those who use false or fraudulent advertising no longer punish the honest companies.

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