FTC goes after prepaid calling card company for deceptive ads
The Federal Trade Commission is accusing a company that sells prepaid calling cards of using deceptive advertisements, which would violate federal law.
DR Phone Communications makes claims in its advertisements that misrepresent the number of calling minutes its cards actually provide, the FTC said in an announcement Monday.
The agency said the company, which has sales in the billions each year, targets immigrants and misleads them, many of whom depend on the cards “to call friends and family in other countries.”
For the time being, the FTC said the company has agreed to stop its ads until a trial takes place. The FTC said it wants the company to permanently stop its claims and “give up its ill-gotten gains.”
The agency said it bought and tested 169 of DR Phone’s cards and found 100% of them failed to provide the number of minutes advertised. On average, the agency said the cards delivered just a little more than 40% of the advertised minutes, and at worst, one card failed to deliver even 1% of the advertised time.
DR Phone’s cards can be found at convenience stores, grocery stores and kiosks and use brand names like “Beautiful Asia,” Vietnam Best” and “Pearls of Africa,” according to the FTC’s statement. Users can also purchase the company’s cards from its website, where cards for dozens of countries can be found.
The FTC filed the complaint in the U.S. District Court for the Northern District of California.
When asked for comment, David Rosenthal of DR Phone said he unable to do so at this time.
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