Consumer Payment Card News

Phone Card Ripoffs

What you see is not what you get when it comes to any type of phone card. Several months ago a senior executive was charged by AT&T $11.86 for a one minute phone card from Australia when the prevailing rate is 53 cents per minute. Most consumers may not realize that AT&T charges a $7.00 handling charge to bill an international call to a credit card and then charges from eight to ten times the prevailing rate for each minute thereafter. What is most unsettling is that AT&T does not disclose the handling fee in the phone card brochures. Rather AT&T promotes a “competitive rate” for all international calls billed to a credit card. This week the American Public Communications Council is urging the Federal Communications Commission and the Federal Trade Commission to take action on deceptive advertising and practices by prepaid phone card companies. The APCC says prepaid phone cards are often marketed by advertising a specific per minute rate that has little or no relationship to the total charges consumers will actually incur. The trade association says many prepaid cards advertise rates as low as $.01 per minute, however, these advertised rates are misleading since consumers will incur hidden charges, terms, or conditions buried in small print or not disclosed at all. The APCC says consumers need to be aware of the hidden prepaid phone card costs that include connection fees ranging from $0.50 cents to $2.00 per call; surcharges, as high as $0.75 cents, for certain types of calls placed by the consumer; monthly or semi-monthly services fees that are automatically deducted whether or not calls are placed; and the termination of a consumer’s card account resulting in the remaining balance being erased when the balance is no longer sufficient to pay for the minimum connection and calling charge. The APCC notes many cards now require a minimum call duration. If you’ve been ripped off by a phone card tell your story on’s Message Board.

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