FCC fines companies for false advertising of prepaid calling cards

The Federal Communication Commission (FCC) is slapping six companies with a combined $30 million in fines for falsely advertising low-cost prepaid calling cards.

Locus Telecommunications Inc., Lyca Tel LLC, NobelTel LLC, Simple Network Inc., STi Telecom Inc. and Touch-Tel USA LLC were each fined $5 million for targeting immigrant consumers with advertisements that promised hundreds or thousands of minutes in international phone calls for just a few dollars.

{mosads}The FCC said the cards only provided consumers with a fraction of the minutes promised due to multiple fees and surcharges that were not clearly disclosed.

The agency said prepaid calling cards are popular within immigrant communities because they are used to help immigrants stay in touch with family and friends in their home countries.

The cards are typically sold in denominations of $2, $3, and $5 at newsstands and in grocery and convenience stores. The FCC said companies often market prepaid cards under a variety of brand names and advertise them to consumers primarily using posters displayed in retail locations.