A New Jersey man and the companies through which he sold prepaid phone cards were fined $2.32 million to settle charges that the cards failed to deliver the number of minutes promised, the Federal Trade Commission announced last week.
Fadi Salim sold phone cards mainly to immigrants who wanted to make calls to their home countries. Salim sold most cards over the Internet and at news stands, grocery stores and kiosks nationwide.
According to the FTC, the 141 cards it tested delivered an average of 45 percent of the advertised minutes. In addition, there were "hang-up" and weekly fees that were only vaguely referred to in very small print, the statement said.
In addition to Salim, the companies included in the consent order with the FTC are Millennium Telecard Inc., Millenium Tele Card LLC, Coleccion Latina Inc. and Telecard Center USA Inc.
Cards were sold with names such as "Africa Magic," "Hola Amigo" and "Viva Ecuador."
Salim is barred from misrepresenting the amount of time consumers will receive and must clearly and prominently disclose fees.
Choosing a phone card
The FTC recommends you read the fine print to determine whether any fees are charged before buying a prepaid card. It also suggests you buy a small-denomination card to test it for problems such as bad connections, busy access numbers and PIN numbers that don't work.