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Texas Sues Prepaid Calling Card Company

Charges Next-G with delivering fewer minutes than advertised

May 27, 2008 

Court documents filed by Attorney General Greg Abbott indicate Next-G Communication, Inc. produces, sells and distributes prepaid calling cards throughout Texas but consistently fails to deliver the number of minutes it advertises to customers.

The AG’s joint investigation with the Public Utility Commission (PUC), which regulates prepaid calling card companies in Texas, found that Next-G’s prepaid calling cards consistently delivered only 40 percent of the minutes claimed on the defendants’ advertising posters and confirmed by Next-G’s voice prompt given at the beginning of each call.

The defendants typically sold the cards at small grocery stores and convenience stores for less than $10 each.

“Texas consumers who rely on prepaid calling cards for their long distance needs should be getting what they are promised,” Abbott said. “We are grateful to the Public Utility Commission for their tremendous assistance on this case. The Office of the Attorney General will continue to crack down on scams that deceive Texas customers.”

According to the legal action, Next-G Communication offers prepaid calling services to several international destinations. To use the card, customers must first dial the defendants’ access number and enter a personal identification number (PIN), which is provided with the card. Once the PIN is verified, the defendants’ computer system prompts the caller to enter a destination phone number and informs the caller how many minutes are available on the card for the call.

State investigators who independently tested the cards found that Next-G’s calling cards consistently failed to deliver either the number of minutes on the advertising posters or the number of minutes prompted at the beginning of the call.

In addition, the calling cards and the advertising posters contain vague and inadequate disclosures about fees and additional charges.

The suit seeks a temporary and permanent injunction against Next-G Communication’s deceptive marketing claims and civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act.

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