Media Contact:
Will Wiquist, (202) 418-0509
will.wiquist@fcc.gov
For Immediate Release
FCC FINES SIX COMPANIES $30 MILLION FOR MISLEADING
CONSUMERS OF PREPAID CALLING CARDS
Companies Engaged in Deceptive Advertising of Calling Cards, Delivered Only a
Fraction of the Minutes Promised to Consumers
--
WASHINGTON, October 21, 2015 - The Federal Communications Commission has fined six
companies a combined $30 million for deceptively marketing prepaid calling cards. The
companies falsely advertised that their low-cost prepaid calling cards could allow consumers far
more calling minutes than were in fact being sold.
Consumers should not have to comb through small print and contradictory disclosures to learn
that the bold promises made in advertisements are false and misleading, said Travis LeBlanc,
Chief of the FCC Enforcement Bureau. Companies that use deceptive tactics to betray
consumer trust should expect to face stiff penalties.
Locus Telecommunications, Inc.; Lyca Tel, LLC; NobelTel, LLC; Simple Network, Inc.; STi
Telecom Inc.; and Touch-Tel USA, LLC were each fined $5 million for deceptively marketing
prepaid calling cards to consumers. The companies targeted advertising to immigrant consumers
promising that the prepaid calling cards, which cost only a few dollars, could be used for
hundreds or thousands of minutes in international phone calls. In fact, for that price, the
consumers would be able to use only a fraction of the promised minutes due to the companies'
assessment of multiple fees and surcharges that were not clearly and conspicuously disclosed to
consumers.
Through the course of its investigation, the FCC's Enforcement Bureau reviewed marketing
materials and disclosures contained on multiple prepaid calling cards and related advertising
posters from the companies. The disclosures did not clearly and conspicuously disclose or
explain the actual charges that would be incurred for a call and that those charges were subject to
change by the companies, often without any notice to consumers.
Prepaid calling cards are frequently marketed to immigrant communities for calling a variety of
international destinations. Such prepaid calling cards are popular within immigrant communities
to help them stay in touch with family and friends in their home countries. The cards are typically
sold in denominations of $2, $3, and $5 at newsstands and in grocery and convenience stores.
Companies often market prepaid cards under a variety of brand names and advertise them to
consumers primarily using posters displayed in retail locations.
Today's fines, voted on by the full Commission, are the final step in the Commission's
investigation of the six companies. In 2011 and 2012, the Enforcement Bureau issued Notices of
Apparent Liability to each of these companies for these deceptive practices.
For more information about the FCC's rules protecting consumers from fraud and deception, see
the FCC consumer guide Prepaid Phone Cards: What Consumers Should Know available at:
http://go.usa.gov/3e6ZP Consumer complaints can be filed in both English and Spanish through
the Commission's consumer help desk at 888-225-5322 and www.fcc.gov/complaints
The Forfeiture Orders are available at:
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-112A1.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-113A1.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-114A1.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-115A1.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-116A1.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-15-117A1.pdf
The Notices of Apparent Liability are available at:
https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-130A1_Rcd.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-131A1_Rcd.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-12-120A1_Rcd.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-178A1_Rcd.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-129A1_Rcd.pdf
https://apps.fcc.gov/edocs_public/attachmatch/FCC-11-132A1_Rcd.pdf
Action by the Commission September 14, 2015 by Order (FCC 15-112, FCC 15-113, FCC 15-
114, FCC 15-115, FCC 15-116, FCC 15-117). Chairman Wheeler, Commissioners Clyburn, and
Rosenworcel. Commissioners Pai and O'Rielly dissenting and issuing statements.
###
Office of Media Relations: (202) 418-0500
TTY: (888) 835-5322
Twitter: @FCC
www.fcc.gov/office-media-relations
This is an unofficial announcement of Commission action. Release of the full text of a Commission order
constitutes official action. See MCI v. FCC, 515 F.2d 385 (D.C. Cir. 1974).
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