FCC Fines Six Companies $0M for Deceptive Marketing of Calling Cards

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).

LINK:	http://www.fcc.gov/document/fcc-fines-six-companies-30m-deceptive-mark...
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