A federal court has temporarily barred several marketers of prepaid phone cards from using what the Federal Trade Commission characterizes as deceptive advertising.

The U.S. District Court for the District of New Jersey issued a temporary restraining order against Millennium Telecard and three other defendants who the FTC accused of using deceptive practices to market prepaid phones cards on the Internet; at newsstands, grocery and convenience stores; and in kiosks nationwide. The cards were sold under a variety of names, including "Africa Magic," "Hola Amigo," and "Viva Ecuador."

The FTC said the defendants misrepresented the number of minutes the cards deliver and failed to adequately disclose that fees could reduce the cards' value. The other defendants named in the complaint are Coleccion Latina, Inc., Telecard Center USA, Inc., and their principal, Fadi Salim.

"The defendants' ads fail to clearly disclose there are other charges, such as hang-up fees and weekly fees that can wipe out the value of the card after even one short call," said the FTC statement. "Such fees are disclosed in a tiny font and in vague terms that are hard to understand in any language."

It said that extensive testing of the cards found that they delivered an average of only 45 percent of the advertised minutes. Of the 141 cards tested, the FTC said, 139 failed to deliver the number of minutes advertised on point-of-sale posters. The cards are intended for calls to many international locations, including Argentina, Brazil, the Dominican Republic, Ecuador, Mexico, Pakistan, Poland, Vietnam, Ghana, Nigeria, and El Salvador.

The court also froze the defendants' assets and appointed a receiver to take control of the defendant companies. A temporary restraining order is not a finding of wrongdoing.

The FTC says it plans to seek a permanent halt to the deceptive practices and an order requiring the defendants "to provide consumer refunds or give up their ill-gotten gains."

A recent Consumer Reports investigation of the multi-billion dollar prepaid phone card industry found that the cards generate many complaints to government agencies and on online forums. Among them are undisclosed fees, higher-than-advertised rates, charges for calls that never went through, and poor or non-existent customer service. (El artículo está disponible en español.)