Class Action Lawsuit Against Prepaid Provider Results in Potential Multi–Million Dollar Settlement


On July 13, 2010, a federal magistrate judge tentatively endorsed a settlement agreement worth 8.4 million dollars (plus an additional two million dollars for attorneys fees and costs), thus, potentially ending a class action lawsuit against prepaid calling card provider STi Prepaid LLC (“STi Prepaid”).  However, the settlement is not final and will need to be approved during an additional “fairness hearing,” scheduled for November 16th.

The class action lawsuit alleged that STi Prepaid‘s calling cards did not provide as many minutes of calling as advertised and that the cards lacked voice prompts to inform users of how many minutes they had left on the cards.  Specifically, the plaintiffs accused STi Prepaid of unjust enrichment, fraud and misrepresentation, and violation of the New Jersey Consumer Fraud Act (“CFA”).  STi Prepaid has denied all allegations and does not admit to any wrongdoing in the proposed settlement.

Clients who wish to read more about this situation can access a full length article at the following link:

New Jersey Law Journal

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