Prepaid Calling Card Guidelines Established in Recent State and Federal Enforcement Actions


On June 11th, we advised you that the Federal Trade Commission (“FTC”) and several State Attorney General Offices (“SAGOs”) have initiated legal proceedings attacking the sales and marketing practices of the prepaid calling card industry as being unfair and deceptive. The practices targeted by the FTC and SAGOs focus on the fundamental aspects of prepaid calling card functionality, including the number of available minutes, the application of surcharges and fees and their effect on usage and the manner in which terms of use and/or limitations are disclosed. In short, the focus of the FTC and SAGOs is to challenge the existing methods of doing business as a prepaid card provider (“PCP”).

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