The Federal Trade Commission has taken action against a company, DR Phone, for selling prepaid phone cards after the agency found that the cards delivered only 40 percent of the calling minutes advertised.

The agency says that DR Phone targeted the immigrant community with prepaid cards with names such as "Beautiful Asia" and "Pearls of Africa," agreed to stop making the claims, which the FTC called misleading, pending a trial in federal court in San Francisco. A spokesman reached at the company's offices in New York City said it had no comment at this time.

A Consumer Reports investigation in May, found problems with a range of prepaid phone card companies in which special fees, maintenance charges, and other costs quickly ate up the value of the cards, diminishing available minutes. Our shoppers went into convenience stores, gas stations and bodegas to buy more than 130 cards. They found that about three-quarters of the phone cards they bought didn't disclose calling rates. And, given the multitude of murky fees and surcharges imposed by many of the cards, being an informed buyer is nearly impossible.

We also published a prepaid phone card buying guide in eight languages, with advice on how you can protect yourself while making international calls.

The FTC says that it tested 169 cards from DR Phone and found that all of them failed to deliver the promised minutes. The worst card delivered only 1 percent of the promised calling time. The agency says it is part of a crackdown on the prepaid phone card industry for such practices.

More from the FTC news release:

"Marketing material - typically point-of-sale posters - displayed brightly colored text bubbles touting calling minutes to a particular destination with a card of specified amount—for example, "Philippines 70 min-per $5." Large letters at the top of the posters claimed, 'No Fees,' 'No Connection Fee,' and 'No Maintenance Fee.' Small print at the bottom of the posters made vague reference to fees without adequately disclosing what those fees would be. One disclosure simply stated 'International calls made to cellular phones and calls via toll free numbers are billed at higher rate,' without adequately disclosing what those higher rates would be."

You can file a complaint about prepaid calling cards with the FTC.

Source:
FTC Halts Deceptive Prepaid Calling Card Scheme Targeting Immigrants [FTC]