Total Call International Inc. of Los Angeles will pay $300,000 in civil penalties to settle a lawsuit alleging that the cellphone company charged customers steep undisclosed fees.
Under the terms of the settlement, the state, which filed the suit as part of an enforcement action, will monitor the company's fees for four years.
The settlement came shortly after California Atty. Gen. Jerry Brown filed the suit Friday in San Francisco Superior Court.
A court order blocking Total Call from charging "hidden and deceptive" fees on its prepaid calling cards was also issued Friday, said Brown spokesman Scott Gerber.
Total Call International admitted no wrongdoing in the settlement.
The company did not respond to requests for comment Friday.
The state's complaint against Total Call said the company was breaking California's false-advertising and unfair-competition laws by not disclosing all the fees charged on its prepaid calling cards.
By advertising low per-minute base rates on its calling cards and then charging consumers steep, undisclosed add-on fees, Total Call was able to greatly reduce the amount of calling time available on each card, Gerber said.
As a part of the settlement, Total Call has to disclose all fees, add-ons and surcharges clearly to customers, and all charges have to be included when advertising the per-minute rate of its calling cards.
The company has already eliminated one of the surcharges, Gerber said.