Prepaid calling cards: Beware misleading call times and hidden fees

Prepaid calling card troubles
Prepaid calling card troubles

Depending on who you ask, prepaid calling cards are either a tremendous rip-off or a fantastic money saver -- but based on an ongoing government crackdown against shady operators, lots of customers are getting far less than they paid for.

In 2007, the Federal Trade Commission created a joint federal-state task force to expose deceptive marketing practices in the prepaid calling card industry. The task force, which includes representatives from the Federal Communications Commission and more than 35 states, has successfully prosecuted a number of prepaid calling card operators and forced them to pay more $4 million to settle FTC charges.

In June 2009, Clifton Telecard Alliance One(CTA) agreed to pay $1.3 million to settle FTC charges that its prepaid cards provided less than half the advertised minutes, charged hidden fees, and failed to disclose that their customers would be charged regardless of whether their calls were actually connected. CTA cards, which are marketed to immigrants under names such as "African Dream" and "CTA Mexico," are sold through retailers, gas stations and convenience stores for $2 to $20.