STATEMENT OF
P. MICHELE ELLISON
CHIEF, ENFORCEMENT BUREAU
FEDERAL COMMUNICATIONS COMMISSION
May 8, 2012
Every day, millions of Americans—many from our most vulnerable minority and
immigrant communities—rely on prepaid calling cards to stay in touch with family and friends
around the world. Sadly, these consumers often don’t get what they paid for. So, thank you,
Consumer Reports, for bringing further attention to the problems in the prepaid calling card
market.
The FCC is committed to strong, consistent enforcement action in this area. We have
sent a clear message that misleading consumers doesn’t pay and won’t be tolerated. Over the
last nine months, the FCC has taken aggressive enforcement action, proposing $25 million in
penalties against five prepaid card companies.
In each case, we found a disturbing trend—the use of redundant fees, “fine print,” and
vague descriptions that could cause prepaid cards to be exhausted after only a tiny fraction of
the advertised minutes had been used. For instance, in one case, a card advertised hundreds of
minutes, but what the unsuspecting consumer didn’t know is that a caller could only get all of
those minutes by making a single 13-hour call.
As I said when we took the first enforcement actions last summer, prepaid card providers
should re-evaluate their business and marketing practices consistent with our Enforcement
Advisory.
I am encouraged by the recent formation of an industry association that may develop best
practices in this area. Nevertheless, the FCC’s Enforcement Bureau will remain vigilant in its
pursuit of those who seek to mislead and deceive consumers. We will diligently pursue new
investigations of past misconduct. And, we will not hesitate to take additional enforcement
action where warranted.
We want to hear from you. Anyone who uses a prepaid card that does not deliver as
advertised or that includes hidden charges and fees should contact the FCC by telephone, the
Internet, or mail. Today, we also issued another Enforcement Advisory with a Consumer Alert
(attached) urging consumers to be smart and selective about prepaid calling card purchases. In
addition, our consumer guide (in English and en español) and tip sheet on prepaid cards, which
I’ve shared with Consumer Reports, list simple steps consumers can take to identify, prevent,
and help fight deceptive marketing of prepaid cards.
Together, we can bring an end to predatory, prepaid calling card schemes.
