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Card Companies Called Out

International calling cards don’t always deliver on their promises of inexpensive telephony, according to a recent study. The report, which was released by The Hispanic Institute, claims that despite lofty promises of cheap calls from the United States to countries such as Mexico and Guatemala, on average, international calling cards delivered only 60 percent of their stipulated usage.

According to Gus West, president of The Hispanic Institute, “American consumers lose up to a million dollars a day because of fraudulent phone cards.”

Using automated generators to make calls with phone cards from New York, Florida, and Washington, D.C., to Mexico and Guatemala, The Hispanic Institute tracked how much time each card provided, as well as the listening quality for the calls. While a few cards provided calls that lasted the entirety of their promised time, many delivered less than half of their advertised minutes, and a few never managed to connect at all.

Cards from New York that were tested included those manufactured by the companies Diamond, STI, RTG, Lycatel, and GEO. While some New York based phone cards performed well, most notably the GEO “I Love NY,” and STI “World” cards (although the GEO card provided poor sound quality), other New York cards failed to fulfill their promises.

Most of the calling cards that were manufactured by RTG, Lycatel, and Diamond stayed connected for less than 60 percent of their promised time. The RTG “Cocktail Mexico” card supplied a mere 20 percent of its advertised minutes.

West feels that members of the Hispanic community in particular have been dealt the brunt of the calling card industry’s deception. “So many of us use calling cards to keep in touch with friends and family abroad,” he said.

In August, Congressman Eliot Engel introduced the Calling Card Consumer Protection Act, which seeks to require calling card companies to include terms and conditions on all advertising, cards, and packaging, as well as details related to additional fees.

“The ones who need these cards most can afford [hidden charges] least,” said a spokesman for Engel.

Connecticut’s “Miscellaneous Consumer Cards” statute does much of what Engel is seeking to do.

One of the companies operating in New York, STI, was among a slew of prepaid calling cCard corporations that were subpoenaed by Florida’s Attorney General Bill McCollum’s Economic Crimes Division this past June.

“The investigation will examine the allegations that immediately after the first call is made on a card, companies begin deducting various fees, service charges, taxes, and in some cases, round call times up in three minute increments,” according to a statement released by McCollum.

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