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Phone card fraud is a rampant problem in the industry, as evidenced by a new Consumer Reports study. Approximately 75% of prepaid phone cards the organization purchased didn't even disclose calling rates. Some used "units" and others doubled the per-minute cost after the first call.
Prepaid phone cards are popular in low-income, minority and immigrant communities, according to the Federal Communication Commission. Users see them as a cheap way to call relatives abroad. However, some companies see these communities as vulnerable and swoop in.
Many phone cards include fees that sap the value within minutes of use, according to Consumer Reports. There are post-call, pre-call and activation fees. There are fees if you use the card more than once. Then there are the cards that barely even work.
Though some cards simply don't include relevant information, others bury it in the fine print. In light of the Consumer Reports study, the Federal Communications Commission is urging the public to read a phone card's fine print. Before you buy a phone card, make sure you:
- Understand the real rates, including any fees, conditions and limitations;
- Determine if the minutes are for a single or multiple calls;
- Locate the expiration date; and
- Ensure the card includes a toll-free customer service number.
You can also scour the Internet for signs of phone card fraud. Signs include busy service numbers, providers that no longer exist, reports of unmentioned fees and expiration dates, and poor quality calls.
If you'd like to report an incident of phone card fraud, you can contact the FCC at 1-888-CALL-FCC or file a complaint online.