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NEWARK
– The Office of the Attorney General,
through its Division of Consumer Affairs,
has entered into settlement agreements with
seven telecommunications companies regarding
their advertising and sale of pre-paid calling
cards and concerns whether consumers were
receiving the full amount of time for which
they paid.
“Getting
less than what you paid for is illegal and
these settlements ensure that the terms governing
the use of calling cards are clearly and plainly
disclosed to consumers,” Attorney
General Anne Milgram said. “We’ve
told the industry that ‘every second
counts’ and these companies will account
for every second on these cards.”
The settlement terms mirror requirements contained
in a new state law governing pre-paid calling
cards that took effect last year.
“These
settlements, and the state law governing calling
cards provide New Jersey consumers with protection
against the deceptive sales practices which
have plagued this industry for too long”
said David Szuchman, Consumer Affairs Director.
“We’ve changed the business
practices of this industry and the millions
of consumers who buy calling cards each year
will benefit.”
The
seven companies are:
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CVT Prepaid Solutions, Inc.,
40 Cuttermill Road, Suite 500, Great Neck,
New York 11201
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Dollar Phone Enterprises, Inc.,
232 Broadway, Brooklyn, New York 11211
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Epana Networks, Inc., 1250
Broadway, 30th Floor, New York, New York
10001
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IDT Corp., 520 Broad Street,
Newark, New Jersey 07102
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Locus Telecommunications, Inc.,
111 Sylvan Avenue, Englewood Cliffs, New
Jersey 07632
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STi PhoneCard, Inc., 30-50
Whitehouse Expressway, 4th Floor, Flushing,
New York 11354
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Total Call International, Inc.,
707 Wilshire Boulevard, 12th Floor, Los
Angeles, CA 90017
The
settlements conclude investigations into each
company’s business practices related
to pre-paid calling cards. Each company has
paid $5,000 to reimburse the Division’s
costs. Other than CVT (which is no longer
selling pre-paid calling calls), each company
will pay $5,000 per year for the next three
years to offset the cost of the Division’s
continued monitoring for compliance.
As
part of the settlements, each company also
agreed to the following business practices:
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Comply with the Consumer Fraud Act and regulations,
as well as any other state and/or federal
laws, rules and regulations which are applicable
to all future sales and marketing of pre-paid
calling cards by or on behalf of the company;
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Ensure that all minutes or rates, or both,
advertised on any pre-paid calling card,
any point of sale material relating to that
card or otherwise relating to any pre-paid
calling service, shall be available to the
consumer and there shall be no limitations
on the period of time for which the advertised
minutes, or rates, or both, will be available
to the consumer unless those limitations
are clearly and conspicuously disclosed
in the same location on the card, advertising
or point of sale material where the minutes
or rates, or both are advertised;
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Ensure that all service minutes promoted,
advertised or disclosed on any voice prompts
provided at the time the consumer places
a call with company’s pre-paid calling
cards shall be immediately available to
the consumer on that call. The consumer
shall not be charged for any busy signal
or unanswered call;
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Not charge, apply or deduct from a pre-paid
calling card’s balance any fees, taxes,
surcharges or other amounts for use of the
card except: (1) the rate per minute for
the particular destination called; (2) any
permitted fees; and (3) any rate per minute,
fee or charge for use of the card, or permitted
for calls to or from international telephone
numbers, international cellular and international
wireless telephone numbers;
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Clearly and conspicuously disclose all permitted
fees, as well as any other fees and surcharges,
on its pre-paid calling cards and/or packaging
materials and on its advertisements;
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Clearly and conspicuously disclose the company’s
policy of rounding off time for billing
purposes on its pre-paid calling cards and
packaging materials;
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Make available to consumers a toll-free
customer service telephone number to address
any post-order inquiries concerning all
pre-paid calling cards, and clearly and
conspicuously disclose to consumers the
telephone number in all materials accompanying
the pre-paid calling cards;
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Within thirty (30) days of settlement, make
available through the toll-free customer
service telephone number all information
concerning any charges and deductions and
its and its policy of rounding off time
for billing purposes; and
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For a three-year period, maintain and preserve,
and make available to the Division upon
its request, specified documents and records.
Consumer
Affairs' E-Commerce Investigative Unit conducted
the investigation of this matter and Deputy
Attorney General Jeffrey Koziar of the Consumer
Fraud Prosecution Section provided the legal
representation.
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