Los Angeles-based Total Call International, Inc. can no longer charge "hidden and deceptive" fees for its pre-paid calling cards, according to California Attorney General Edmund G. Brown Jr.
"Total Call International has raked in profits by advertising bargain basement prices then charging exorbitant fees when their cards were used. This new agreement," said Brown, safeguards consumers "by forcing this company to fully disclose hidden and deceptive calling card fees."
Brown charged that Total Call International advertised low per-minute base rates on its calling cards and then charged steep, undisclosed add-on fees and surcharges when consumers used their cards, Brown said. This significantly reduced the amount of calling time available.
Brown and the California Public Utilities Commission launched an investigation and prepared a lawsuit contending that Total Call International violated a California law that specifically requires disclosure of pre-paid calling card fees, as well as California's false advertising and unfair competition laws.
The stipulated judgment resolving the case requires Total Call International to:
• Disclose all fees, add-ons, and surcharges in a clear and conspicuous manner and include those charges in the marketing of its per-minute rate.
• Maintain records and allow the Attorney General's office to monitor its activities to determine if Total Call International is in compliance with the settlement and California Law.
• Pay civil penalties of $300,000.
During the course of the investigation, Total Call International agreed to stop charging a "real-time rate surcharges," costing the company $1.5 million in profits. Total Call International did not admit any wrongdoing.
Calling cards, often sold at newsstands and grocery stores, are meant to be a convenient, affordable tool for users that make frequent international calls and may not have regular access to telephone service.
Brown says calling card users should take the following steps to protect themselves:
1. Make sure you're getting what you pay for — buy a card for a small denomination first to test out the service.
2. Check with family and friends to find out their experience with calling cards.
3. Ask retailers if they stand behind the card if the telephone service is unsatisfactory. It's important to remember that the store where the card is purchased doesn't control the quality of the service.
4. Remember that very low rates, particularly for international calls, may indicate poor customer service, or a sign that hidden fees and surcharges apply.
5. Always look for disclosures about surcharges, monthly fees, per-call access, in addition to advertised rate-per-minute.
6. Check the expiration date. Some cards expire after a certain amount of time.
7. Make sure the card comes in a sealed envelope or has a sticker covering the PIN. Otherwise, anyone who copies the PIN can use the phone time you've already paid for.