Prepaid calling cards, first introduced to the retail market two decades ago, have undergone explosive growth over the last ten years thanks to globalization of the U.S. workforce and declining international long distance costs. This combination has enabled the U.S. prepaid industry to generate annual revenues estimated at well over four billion dollars.

Over the years, the promise of huge profit margins has created a competitive drive to advertise and sell cards with "cheaper rates" and "more minutes" to an ever-growing base of migrant consumers. Beginning as early as 2000, this race to “provide” more minutes for less money has led many companies to promise more than they deliver–at the consumers expense.

Recently, the House passed the Calling Card Consumer Protection Act (H.R.3993). House of Representatives voted 381-41 to pass an amended version of the Calling Card Consumer Protection Act (H.R.3993) to require accurate and reasonable disclosure of the terms and conditions of prepaid telephone calling cards and services. The bill was introduced on November 3, 2009 by Representative Eliot Engle (D-New York), approved by the Subcommittee on Commerce, Trade, and Consumer Protection on March 24, 2010, and by the House Committee on Energy and Commerce on May 5, 2010. Senator Bill Nelson (D-Florida) introduced a similar bill in the Senate in March 2009, which has seen no further action. Similar legislation was introduced in the 110th Congress, but was not enacted. H.R.3993 now goes to the Senate for consideration. On June 24, 2010 it was received in the Senate and referred to the Committee on Commerce, Science, and Transportation.

H.R. 3993 would establish requirements for information that must be displayed on prepaid telephone calling cards, their packaging, and in advertisements for the cards. The bill would require the Federal Trade Commission (FTC) to develop regulations that would specify the information to be displayed, including the company name, the number of minutes available, the dollar amount of the card, the expiration date, and any fees, charges, or limitations associated with the card.

The bill would allow state attorneys general, utility commissions and consumer protection agencies to bring civil action on behalf of state residents that were threatened or adversely affected by any person in a practice that is prohibited under this bill. H.R. 3993 would establish that the regulations enacted related to this bill would pre-empt any similar state laws.

Finally, within three years of enactment, the FTC and the Government Accountability Office would be required to report on studies on the business practices of the calling card industry and the effectiveness of the disclosures required by the legislation.

Whether wireline or wireless, phone calls are a vital part of our communication system, and a piece of technology that many of us take for granted.  Yet for prisoners, the homeless, migrants and immigrant detainees, it’s a different story—phone calls are a privilege, not a right.  Exorbitant collect-calling surcharges, limited ‘Safelink’ minutes, outrageous “pay-per-minute” prices and fraudulent calling cards are just some of the issues these community members face.

Take a minute to see how your Represetative voted.  Let them know your organization, and MAG-Net care about Phone Justice, and continue to follow this important issue as it moves to the Senate.


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