Published: December 20, 2007 09:31 am         

Calling card fraud alleged

Hispanics targeted, group says

The Hispanic Institute says a new study has unearthed rampant fraud in the pre-paid calling-card industry.

"We have discovered that the average calling card delivers only 60 percent of the minutes promised," explained Gus West, president of the Hispanic Institute. “American consumers lose up to a million dollars a day because of fraudulent phone cards.”

The Hispanic Institute tested 45 different international pre-paid calling cards for efficacy and value to see whether they lived up to their promises.

Study findings included:

• Only one-third of the 45 cards tested delivered the full call-time promised.

• Seven of the 45 cards (15.6 percent) tested didn't work at all.

• Eight of the cards tested had call completion rates of 50 percent or less. Three cards provided less than 20 percent of the minutes promised.

• Dropped calls, poor listening quality and post-dial delays of up to 50 seconds were hallmarks of the majority of cards tested. Fifteen cards did allow for the caller to utilize the entire time balance.

Pre-paid phone cards have emerged as a cost-effective option for those calling abroad. They are especially popular among recent immigrants who use calling cards to keep in touch with friends and family abroad.

According to West, many calling-card firms employ scams that involve deceptive advertising, publicizing a certain number of minutes but delivering far fewer. West says that Hispanics are hit particularly hard.

"Our findings quantify the unfortunately widespread nature of these scams," said West.

Prepaid phone cards have grown into a $4 billion industry, responsible for 11 billion calls in 2004.

"Fraudulent companies need to get the message that we will not stand for this sort of double-dealing," West said. "Armed with the findings of our new study, I'm hopeful that we'll be able to affect change on this important consumer issue."

     

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