Cards don't deliver: Hispanic advocacy group warns that some international callling deals mislead consumers

For 25 years, Miguel Martinez has relied on calling cards to keep in touch with his family in the Mexican state of Hidalgo. It's become something of a painful routine for the construction worker.

"Every time I call home I know I'm getting ripped off," said Martinez, a migrant laborer based in Brownsville. "With those cards, you never get what you pay for."

Between hidden costs and fees and blatant misrepresentation, calling card companies have long been taking advantage of consumers, according to a recent study by the Hispanic Institute, a Washington, D.C.-based think tank that focuses on issues concerning the Hispanic community.

On a number of cards sold in Brownsville gas stations and kiosks, there is no indication of how many minutes the consumer is purchasing.

"You call a number and they tell you that you have half the minutes you thought you were buying," Martinez said, as he stood next to the pay phones near Brownsville's Gateway Bridge.

The Hispanic Institute study cites the number of minutes provided by 15 calling cards in relation to the number advertised.

Some cards, like Telmex Compañero Mexico and RTG Cocktail Mexico, provided less than 20 percent of the advertised minutes.

The average card delivers only 60 percent of the promised minutes, which means that if you buy a card promising 60 minutes of phone time, you only get to talk 36 minutes.

Mexican-Americans, the largest group of international callers in the country, have been especially vulnerable to the deception. The $4 billion pre-paid calling card industry might be unfairly charging the Mexican-American community as much as $1 million every day, according to the National Consumers League.

The U.S. House of Representatives on Oct. 22 passed legislation in an attempt to combat deceptive business practices plaguing the industry. The legislation requires pre-paid calling card providers and distributors to disclose the number of minutes or units on the card, the dollar value of the card and international per-minute rates.

"It's a Wild West of sellers and merchants who too often prey upon the most vulnerable consumers by promising minutes they don't deliver and loading up on hidden or undisclosed charges and fees," National Consumers League Executive Director Sally Greenberg said in testimony to the Federal Trade Commission last week.

The new legislation, sponsored by Rep. Eliot Engel D-NY, requires calling card companies to disclose their rates to customers without masking costs in fine print.

Calling card fraud is a national issue now receiving attention from federal legislators, and Texas Attorney General Greg Abbott has taken special interest in the issue and has filed deceptive marketing charges against NextG Communications Inc., a Houston-based prepaid calling card company.

The Attorney General's joint investigationa with the Public Utility Commission, which regulates prepaid calling card companies in Texas, found that Next-G's prepaid calling cards "consistently delivered only 40 percent of the minutes claimed on the defendants' advertising posters and confirmed by Next-G's voice prompt given at the beginning of each call."

"It's about time," Martinez said when he heard about the new legislation. "This has gone on for way too long."

Percentage of minutes provided versus the number of minutes advertised by international calling cards:

IDT BOSS-WSH Mexico - 100%

Telmex USA Compañero Guatemala - 100%

GEO I Love NY Mexico - 100%

STI World Mexico - 100%

Dollar Phone Rey Guatemala - 70%

RTG Martini Guatemala - 65%

Lycatel Success Guatemala - 60%

Dollar Phone Cofee Time Guatemala - 60%

Diamond Arenque Guatemala - 55%

Diamond Bingo Guatemala - 50%

GEO GEO Florida Guatemala - 50%

Lycatel Call Me Guatemala - 50%

RTG Cocktail Mexico - 20%

Touch-Tel USA La Salvadoreña Mexico - 20%

Telmex Compañero Mexico - 15%

SOURCE: The Hispanic Institute