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California Public Utilities Commission
505 Van Ness Ave., San Francisco
FOR IMMEDIATE RELEASE PRESS RELEASE Media Contact: Terrie Prosper, 415.703.1366, firstname.lastname@example.org
CPUC AND ATTORNEY GENERAL COMPLAINT OF DECEPTIVE MARKETING LEADS TO SUPERIOR COURT JUDGMENT
AGAINST CALLING CARD PROVIDER
SAN FRANCISCO, May 11, 2009 - The California Public Utilities Commission (CPUC) today announced a Superior Court judgment requiring California prepaid calling card company Total Call International, Inc. (TCI) to clearly disclose all fees, surcharges, and other costs (including "maintenance fees") associated with the use of its prepaid calling cards, to forego $1.5 million in profits, and to pay $300,000 in penalties. The judgment also prohibits TCI from advertising its services in a misleading way.
TCI, a California corporation, markets and distributes prepaid calling cards and prepaid calling services in California and several other states, primarily to Asian and Hispanic consumers. The judgment, which is the second in a series of CPUC enforcement actions against California prepaid calling card providers, requires TCI to remove undisclosed surcharges on select cards.
The CPUC, the AG, and TCI negotiated a settlement of issues arising from an investigation in which the CPUC and AG alleged that TCI engaged in unfair competition and disseminated untrue and misleading statements. The CPUC and AG further alleged that TCI overstated the number of minutes of calling time available on its cards and charged substantial undisclosed surcharges and fees that quickly used up the balance in its prepaid calling cards. TCI has sold cards in California under numerous brands, including "Best Vietnam 2," "Mega China," "Star 1 Latino," "Mega Philippines," "Hola," "Super USA," "Super Mexico," and "Super Asia."
The CPUC is investigating other prepaid calling card providers in response to consumer complaints and recent market activities suggesting rampant consumer abuse. "Prepaid calling cards are often used in immigrant, low income and/or non-English speaking communities where the customer may not have access to less-expensive or more reliable long-distance calling alternatives," said Richard Clark, Director of the CPUC's Consumer Protection and Safety Division. "These cards often come with many undisclosed surcharges and `maintenance fees' attached, which means that the customer often gets much less time than actually promised."
The Governor and the California Legislature amended Business and Professions Code Section 17538.9, effective January 1, 2009, to clarify certain disclosure requirements and standards for advertisement and sale of prepaid phone cards. It also expanded the CPUC's authority to enforce the requirements of Section 17538.9. Using its expanded authority, the CPUC is committed to increase enforcement against prepaid calling card companies.
The judgment, stipulation, and formal complaint against TCI are available on the CPUC's website at www.cpuc.ca.gov/PUC/aboutus/Divisions/Consumer+Protection/Enforcement+Branch/030221_phonecards.htm.
For more information on the CPUC, please visit www.cpuc.ca.gov.