BBB Advice for Avoiding Deceptive Phone Cards

  
     
September 11, 2009
Prepaid calling cards — widely available at stores, newsstands and online — may seem like a great value, but many are so rife with fees and service charges that far fewer minutes are delivered than advertised.

According to the Federal Trade Commission, prepaid phone cards are a $4 billion per year industry. However, a 2007 survey by the Hispanic Institute found that prepaid phone cards delivered only 60 percent of the minutes promised and that fraudulent phone cards were swindling people out of about $1 million every day.
 
The FTC has already gone after several companies for deceiving customers. Allegations against companies include lying about the amount of minutes available and failing to disclose the cost of maintenance fees. In one example, a card from Diamond Phone Card, Inc. claimed to deliver 400 minutes to Mexico but provided only 106 minutes of calling time after fees and service charges were assessed.

Your BBB offers the following advice on how to get the most out of a prepaid phone card while avoiding getting ripped off.
          • Read the disclosures about expiration dates, surcharges, maintenance fees and any fees that might vary based on where you are calling to and from. 
          • Find out rates for both domestic and international calls. Be wary if rates aren’t posted on the card or with associated advertising or displays.
          • Compare rates, but don’t be immediately sold by a low rate. Very low rates should serve as a red flag that the card may not deliver the number of promised minutes.
          • The card should come in sealed packaging that has not been tampered with or have a personal identification number that is not visible or revealed; make sure the protective coating covering PINs has not been scratched off. Cards and packaging that have been tampered with run the risk of having had the identification numbers stolen and used before a buyer can use the card. 
          • Always check out the phone card company with the BBB first at wynco.bbb.org to make sure it has a good reputation for satisfying customers.

Start With Trust. For more BBB consumer advice on avoiding rip-offs, visit wynco.bbb.org or call 800-564-0371.
          
About the BBB
The Better Business Bureau, founded in 1912, is a champion for ethics and trust in the marketplace. Only businesses that meet the high BBB standards are invited to become BBB Accredited Businesses. Today, 128 BBBs across the United States and Canada rate more than 3 million local and national businesses and charities with scores ranging from A to F. Only a BBB Accredited Business may elect to participate in BBBOnLine, one of the most trusted and recognized Internet seal programs in the world.   
The BBB serving northern Colorado and Wyoming is trending toward 1 million instances of service to consumers and businesses in 2009. These services include reliability reports on local companies and charities, access to companies that can be trusted by industry, help with dispute resolution, and trustworthy information on consumer and business topics.