Groups issue ‘Gift Card Holder’s Bill of Rights’ for holiday season – National Consumers League

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November 18, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, DC—The National Consumers League (NCL), the nation’s oldest consumer advocacy organization, today called on issuers of gift cards—banks, credit card companies, and retailers—to go easy on consumers this holiday season by lightening up on fees and expiration dates on gift cards. NCL is asking gift card issuers to adhere to a “Gift Card Holder’s Bill of Rights,” setting out what advocates believe would be fairer terms and fees than those currently associated with the cards.

NCL, joined by Consumer Action and the Montgomery County (Maryland) Office of Consumer Protection, is urging companies that issue gift cards—an industry that has mushroomed into a $97 billion annual business—to adopt more pro-consumer business practices.

“With the worst economic times in a generation looming and many Americans facing job loss, decreased wages, and increases in the cost of health care, groceries, and other goods, this holiday gift-buying season may be a source of dread, not joy, for consumers watching their budgets,” said Sally Greenberg, NCL Executive Director. “The companies who profit from the rise in popularity of gift cards owe it to consumers to reduce their fees and expiration dates, improve the value of their cards, and compete for consumers’ business.”

“Gift cards make great gifts, because they allow the recipient to get something they really need or want, but all too often they are rife with ‘gotcha’ fees and other anti-consumer traps,” said Linda Sherry, Consumer Action’s Director of National Priorities. “We urge gift card issuers to do the right thing and make sure their products have fair terms with no deceptive loopholes that erode their value.”

“While stores in Maryland are prohibited from selling gift cards with expiration dates and fees during the first four years, that is not the law in all states,” said Montgomery County Office of Consumer Protection Director Eric Friedman. “In addition, banks continue to market cards with terms and conditions that are not favorable to consumers. We urge the marketplace to adopt this Bill of Rights for all gift card holders.”

Gift cards, which come in two categories— traditional retail gift cards, or “closed-loop” cards, and those issued by banks and credit card companies, or “open-loop” cards—have become increasingly popular gifts in recent years. During 2007’s holiday shopping season, nearly 70 percent (68.9%) of consumers reported receiving a gift card. Gift cards sales in 2007 totaled $97 billion and are projected to top $100 billion in 2008.

In 2006, the value of unused gift cards reached $8 billion. Depending on unclaimed property laws that vary by state, unused gift card funds eventually revert to either the state or issuing company. The Gift Card Holder’s Bill of Rights recommends, however, that gift card funds that go unused due to loss, theft, or failure to redeem should go into state coffers and be used to benefit consumers, rather than back into the pockets of the card issuers.

The flexibility of gift cards has clear appeal to consumers, but terms and conditions may be turning many potential buyers away. According to the National Retail Federation, nearly one in ten consumers (9.8%) say they are discouraged from buying gift cards because they are worried about fees and expiration dates.

“Through a dizzying array of extra costs that include maintenance fees, inactivity fees, dormancy fees, and card-replacement fees, as well as unreasonable expiration dates, and high point-of-sale fees, card issuers are pocketing more of the consumers’ money than we think is appropriate or fair,” said Greenberg. “To address this problem, we ask the companies that issue gift cards to consider the guidelines set forth in our Gift Card Holder’s Bill of Rights. We think customers will greatly appreciate having a few more dollars in their pocket, especially during this very rough economic time. ”

Gift Card Holder’s Bill of Rights

For more detailed explanations of each “Amendment,” or for consumer information about choosing and using gift cards wisely, visit www.nclnet.org/giftcards.

  1. Gift cards should not have expiration dates.
  1. The value of gift cards should not be reduced by arbitrary fees that diminish a card’s value.
  1. Fees assessed on a card purchase should not exceed five dollars or ten percent of the value of the card, whichever is less.
  1. Card replacement fees should not exceed two dollars or ten percent of the purchase price of the card, whichever is less.
  1. Cards with a balance of five dollars or less should be redeemable for cash with no fee.
  1. Balance inquiries should not deduct from the value of the card.
  1. Terms and conditions should be clearly disclosed.
  1. Unused funds should not go into the card issuers’ pockets, but should accrue to a state fund to be used for the specific benefit of consumers.
  1. Funds from the sale of gift cards should be segregated and held in trust accounts so as to be automatically honored in the event of the cards issuer’s bankruptcy.
  1. These rights should cover any electronic gift card with a banked dollar value.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

About Consumer Action

Consumer Action (www.consumer-action.org), founded in 1971, is a national non-profit consumer education and advocacy organization headquartered in San Francisco, with offices in Los Angeles and Washington, DC.

About the Montgomery County (Maryland) Office of Consumer Protection

The Montgomery County (Maryland) Office of Consumer Protection (OCP) investigates thousands of complaints each year involving automotive sales and repairs, new home purchases, home improvements, credit and financial issues, retail sales, internet services and most other consumer transactions. Consumers can check our latest Gift Card Reports at: https://www.montgomerycountymd.gov/consumer

Keep out unwanted guests – National Consumers League

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November 1, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, DC- Computers have revolutionized the ways we learn, work, shop, pay bills, and communicate with others. But like our homes, our computers contain sensitive and valuable information, so consumers must be careful who they “let in,” warns the National Consumers League. This month, NCL is offering advice for keeping your computer’s security strong and up-to-date in its “2008 Consumer Calendar Tips: Do We Have Tips for You!”

The nation’s oldest consumer advocacy organization, NCL works to educate people about how to make wise decisions in today’s marketplace. Each month, NCL’s Web site, www.nclnet.org, will feature the calendar and tips for the month. Covering a range of subjects from medication safety, to avoiding scams, the tips are sponsored by major companies, government agencies, and organizations. The November tips about keeping out unwanted guests were sponsored by AOL. This month’s tips offer advice and information about security tools including firewalls, anti-virus and anti-spyware software, and patches.

The print version of the calendar was distributed to consumers free of charge through agencies and organizations around the country. There are no printed copies of the calendar remaining.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Keep out e-ghosts and goblins this National Cyber Security Month – National Consumers League

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October 29, 2008

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC — In observance of National Cyber Security Awareness Month in October, the National Consumers League (NCL) is cautioning consumers about computer-based scams threatening their bank accounts and other sensitive personal information. NCL is the nation’s oldest consumer organization, and it collects reports of suspected and confirmed Internet and telemarketing fraud, identifies new scams and trends, and works with law enforcement to catch crooks at NCL’s Fraud Center. This month, NCL’s Fraud Center is focusing its efforts on how consumers can protect themselves from the evolving tactics that are used for online phishing scams. Phishing is when ID thieves trick people into providing their social security numbers, financial account numbers, PIN numbers, mothers’ maiden names, and other personal information.

“Consumers should be able to use their computers for fun, entertainment, banking, and other personal business with confidence,” said John Breyault, Director of NCL’s Fraud Center and Vice President for Public Policy, Telecommunications and Fraud. “But in order to do so, they must be informed about and protected against the sneak attacks scammers use to capture sensitive personal information. During National Cyber Security Awareness Month and year-round, consumers should endeavor to keep better control of their computers and their privacy.”

NCL has issued new tips for consumers this month to protect them from the e-ghosts and goblins that may be out to get them:

  • Don’t click on links within emails that ask for your personal information.
  • Never enter your personal information in a pop-up screen.
  • Protect your computer with spam filters, anti-virus and anti-spyware software, and a firewall, and keep them up-to-date.
  • Only use secured browsers when entering personal information. Look for a lock symbol to appear at the bottom of the Web page, and for the URL in the browser window to change from “http” to “https” to ensure that the page you’re on is secure.
  • Don’t shop online or do online banking while using an unencrypted or open wireless network, like those provided for free at coffee shops or some airport hotspots. Secure your own wireless network at home by encrypting it with a password. This will keep out your neighbors, but more importantly, it will keep out hackers and thieves who look for open/unencrypted wireless network to capture others’ financial information.

For more information about avoiding email and Web-based scams, visit www.fraud.org.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Seniors, don’t be an easy target – National Consumers League

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October 1, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, DC- Con artists use many tricks to gain the trust of their victims, and many of them are experts at what they do, warns the National Consumers League. Many have perfected their pitch to successfully target seniors, a vulnerable group of consumers, many of whom may live on fixed incomes or have more free time to consider alluring pitches. This month, NCL is offering older consumers (and their loved ones) advice on how to weed through a fraudulent offer and avoid being duped in its “2008 Consumer Calendar Tips: Do We Have Tips for You!”

The nation’s oldest consumer advocacy organization, NCL works to educate people about how to make wise decisions in today’s marketplace. Each month, NCL’s Web site, www.nclnet.org, will feature the calendar and tips for the month. Covering a range of subjects from medication safety, to avoiding scams, the tips are sponsored by major companies, government agencies, and organizations. The October tips about scams against seniors were sponsored by the Direct Selling Association. This month’s tips feature four common scams that target seniors:

  • Bogus Sweepstakes and Lotteries
  • Phony Charities
  • Pyramid Schemes
  • Home Improvement Fraud

The print version of the calendar was distributed to consumers free of charge through agencies and organizations around the country. There are no printed copies of the calendar remaining.

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

New survey reveals consumers wary of prescription switches – National Consumers League

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October 1, 2008

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC — According to a new survey released by the National Consumers League

(NCL) today, nearly three-quarters of prescription drug users would be very concerned if a drug they were prescribed was switched to another drug designed to treat the same condition without their doctor’s knowledge. Even with their doctor’s knowledge, one in five surveyed are concerned about the practice, known as therapeutic substitution, the dispensing of an alternative to a prescribed medication that is not chemically or generically equivalent but is in the same therapeutic class and is used to treat the same condition.

“Consumers are justifiably concerned about the practice of therapeutic substitution, how it’s done, and who’s involved,” said Sally Greenberg, National Consumers League (NCL) Executive Director. “For some conditions and treatments, it may make good financial or medical sense to swap out one prescription for another. But, as consumers reported in our survey, it’s essential for them to be a part of this process, to know their doctor is aware and supportive of the switch, and to feel confident that their health and treatment – not financial incentives – are top priority.”

In an era of skyrocketing health care costs, insurance companies may turn to the practice of substituting similar (but chemically different), less-expensive drugs, from the same class.

Advocates are concerned primarily about the practice when it occurs without the patient’s knowledge, or without discussion and consent of their physician. However, opinions fall on either side of the debate, with physician groups expressing concern over patient safety, and pharmacist groups being more supportive of the practice as a cost-savings measure and a way to optimize patient care.  In some cases, the substitution can be beneficial or inconsequential, but in others – especially in treatment of epilepsy, mental health, and cardiovascular problems – it can be less effective or pose dangers, especially if done without the knowledge of the consumer or prescribing physician.

“Without transparency, therapeutic substitution could introduce efficacy or safety issues, including unknown drug interactions and potentially serious health consequences. It may evoke confusion or fear on the part of patients already feeling frustrated by a failing health care system,” said Greenberg.

The online survey of 1,387 adults aged 18 and older who have filled a prescription in the past year, which was conducted by Harris Interactive® for the NCL between August 25 and September 2 of this year, revealed that most consumers are not aware first-hand of therapeutic substitution, but they have objections and concerns about how and when a prescription drug should be swapped for another.

NCL released the survey today and announced a public education campaign to educate consumers about the practice of therapeutic substitution at its Web site, www.nclnet.org. New resources help explain the practice and empower consumers to ask the questions necessary to feel comfortable and in control of their health care. For an executive summary and full copy of the survey, click here.  The survey also polled a sample of statin users to test the awareness of patients taking medications that might be impacted by therapeutic substitutions.  The views of this group largely mirrored those of the general population.

Survey Highlights

Consumers concerned about therapeutic substitutions that don’t involve doctor

  • Overall, prescription drug (Rx) users would be very concerned if a drug they were taking was switched to another drug in the same class without their doctor’s knowledge or consent.
  • Nearly three-quarters (70 percent) would be very or extremely concerned if their prescription or had been changed without their doctor’s knowledge and consent for a different medication meant to treat the same condition. And 77 percent strongly oppose the practice without the consent of the prescribing doctor or patient.

Consumers’ experiences with therapeutic substitution less than satisfactory

Of those who reported experiencing therapeutic substitution for themselves or a family member, 33 percent say that they (or their family member) did not have their doctor consulted before the substitution occurred, and two-thirds (66 percent) say that they/their family members were not consulted about the switch. Nearly half (47 percent) were dissatisfied (or their family was) with how the process occurred and report that this substitution did not result in lower pocket costs. Only a third (34 percent) felt that the substituted medication was just as effective as the original medication.

Consumers don’t know much about therapeutic substitution, but believe it happens frequently

  • 66 percent of Rx users surveyed have never heard of the practice of therapeutic substitution. 10 percent of Rx users report that they personally experienced therapeutic substitution of their medication in the past two years, and 9 percent said that a family member experienced it.
  • When respondents were given a description of therapeutic substitution (“replacing the prescribed drug with a chemically different drug (not just generic version of the branded prescribed drug)”), the vast majority of Rx users said they believe therapeutic substitution is occurring at least sometimes in the U.S. (84 percent), without informing the patient (68 percent) or the prescribing physician (59 percent).

Consumers are open to therapeutic substitution, but certain factors determine their comfort level

  • Rx users are most likely to consider switching to a different medication if their physician felt that the two were interchangeable (57 percent).
  • A letter from the insurer may not put consumers at ease, but it would evoke communication: only 19 percent of Rx users say they would consider switching to a different medication meant to treat the same disease if their insurance company sent a letter recommending this change, but receiving such a letter would inspire 71 percent of Rx users to have a conversation with their doctor about a less expensive alternative drug.
  • Nearly a third (31 percent) of Rx users say they would consider switching medications if their pharmacist called to discuss an alternative medication.
  • 68 percent of Rx users would oppose insurance companies offering incentives to physicians for switching patients to lower cost alternatives
  • 73 percent of Rx users would oppose insurance companies offering incentives to pharmacists to switch patients to lower cost alternatives

About the Survey

NCL commissioned this survey with an unrestricted educational grant from Pfizer.

This Consumers’ Views on Therapeutic Substitution Survey was conducted online within the United States by Harris Interactive on behalf of the National Consumers League between August 25 and September 2, 2008 among 1035 US prescription drug users aged 18 and older who have filled a prescription in the past year, and an oversample of 352 US statin users aged 18 and older who are currently on a statin medication. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Complete survey results, fact sheets for consumers, and other resources are available at www.nclnet.org.

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

About Harris Interactive®

Harris Interactive is a global leader in custom market research. With a long and rich history in multimodal research, powered by our science and technology, we assist clients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. For more information, please visitwww.harrisinteractive.com.

2008 Trumpeter Awards: National Consumers League to honor Ehrenreich, Blumenthal for careers in service – National Consumers League

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September 30, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, D.C.—The National Consumers League will honor author and activist Barbara Ehrenreich and Connecticut Attorney General Richard Blumenthal with its highest honor, the Trumpeter Award, this week on Capitol Hill. The event will bring together a diverse group of representatives of the labor unions, advocates, legislators, organizations, and industries touched by the two advocates’ esteemed careers.

“The Trumpeter Award is NCL’s highest honor, given to leaders who are not afraid to speak out for social justice and for the rights of consumers. No one fits that description better than Barbara Ehrenreich and Richard Blumenthal,” said NCL Executive Director Sally Greenberg. “Their dedication to improving the quality of life for workers and consumers in the United States has earned them this year’s Trumpeter Award.”

The event will feature a reception, dinner, and speaking appearances by the two honorees, as well as:

Hon. Ann Brown, Former Consumer Product Safety Commissioner Chair
Esther Lopez, United Food and Commercial Workers Union, Civil Rights and Community Action Director
Jane King, NCL Board of Directors, Chair
Sally Greenberg, NCL Executive Director

Event Details

What: National Consumers League’s 2008 Trumpeter Awards Dinner
When: Thursday, October 2, 2008 | 6 p.m. Reception | 7 p.m. Dinner and Presentation of Awards
Where: Hyatt Regency Washington on Capitol Hill, 400 New Jersey Avenue, NW, Washington, DC.

Questions or to RSVP: Larry Bostian, National Consumers League 202-835-3323

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL applauds House Calling Card Consumer Protection Act – National Consumers League

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September 26, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, DC – The National Consumers League today issued the following statement regarding the passage in the U.S. House of Representatives of H.R. 3402, the “Calling Card Consumer Protection Act.” The statement is attributable to Sally Greenberg, Executive Director at the National Consumers League:

“We applaud the House for taking action to protect consumers from the deceptive practices of prepaid calling card companies.  While we support federal action in this area, we have concerns related to the bill’s reliance on disclosure—in place of stronger action—to prevent some of the most egregious anti-consumer practices related to these cards.  We are also troubled by the addition of language preempting states from protecting consumers by requiring additional disclosures, particularly given the leading role that many states, including Florida, New York, and Texas, have taken in this area.  We look forward to working with the bipartisan supporters of the Senate version of this bill to craft stronger legislation that protects consumers of these cards.”

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

 

NCL welcomes John Breyault, Vice President, Public Policy, Telecommunications and Fraud – National Consumers League

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September 25, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, D.C. — John Breyault, formerly of Amplify Public Affairs (APA) in Washington, DC, has joined the staff of the National Consumers League, where he has been named Vice President, Public Policy, Telecommunications and Fraud. At NCL, Breyault will advocate for stronger consumer protections before Congress and federal agencies and serve as director of NCL’s Fraud Center (www.fraud.org).  Additionally, Breyault will coordinate the Alliance Against Fraud, a coalition convened by NCL of consumer and business organizations, government agencies, and companies that are committed to winning the fight against consumer scams.

The National Consumers League is the nation’s oldest consumer group. In 1992, NCL founded the National Fraud Information Center to fight the growing menace of telemarketing fraud, and in 1996, NCL created the Internet Fraud Watch in order to expand its watchdog activities to cover online scams. Today, NCL’s Fraud Center works with more than 200 law enforcement agencies that subscribe to its Fraud Alert system, and it is the sole consumer organization that engages directly with consumers, law enforcement, and industry to document cases, identify emerging trends, and execute consumer education efforts. In recent years, NCL has led the fight against cons such as fake check scams (fakechecks.org) and has collaborated with government agencies, businesses, and other groups to spread the word to consumers about avoiding these scams and decreasing financial loss.

“We are thrilled to have John join our staff,” said NCL Executive Director Sally Greenberg. “His expertise in and dedication to the issues of telecommunications and consumer fraud and his commitment to advocating on behalf of consumers will benefit NCL.”

“I am excited and honored to have the opportunity to join the National Consumers League in its fight on behalf of consumers,” said Breyault. “The current marketplace is complex, even without the pitfalls posed by predatory scam artists. I am very much looking forward to helping NCL educate—and advocate on behalf of—the consumers who need it most.”

Before joining NCL, Breyault spent five years at APA, where he focused on public policy research for APA’s telecommunications, energy, environmental, and health care clients. He was instrumental in helping launch APA’s Web 2.0-related services, including its blogger relations, online social network, and virtual worlds-based practices. Concurrent with his work at APA, Breyault served as Research Director at the Telecommunications Research and Action Center (TRAC), advocating on behalf of residential consumers of wireline, wireless, VoIP, and other IP-enabled communications services.  Prior to joining APA and TRAC, Breyault worked at Sprint in its International Carrier Services Division and at the American Center for Polish Culture in Washington, DC.

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL to House Committee: Are we adequately protecting our child workers? No! – National Consumers League

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September 23, 2008

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC – At a subcommittee hearing of the U.S. House Committee on Education and Labor, where members gathered to consider this question: “Child Labor Enforcement: Are We Adequately Protecting our Children,” Sally Greenberg, Executive Director of the National Consumers League (NCL), issued a resounding “no.” According to Greenberg, who spoke to the Subcommittee on Workforce Protections for NCL, whose history has deep roots in concern for the welfare of child laborers, “much more can and must be done to better protect our young people from the hazards and dangers they confront in the workplace.”

Greenberg cited federal government statistics that reveal a harrowing reality: every 10 days in America, a young person is killed on the job. Every day, more than 100 young workers under the age of 19 are seriously injured or become ill from their work. Greenberg’s testimony focused onthe U.S. Department of Labor’s poor enforcement of the federal child labor laws and recommendations for reforms—both at the department and in legislature to be considered by Congress—to strengthen protections for America’s working children.

“Enforcement of the child labor law is no longer a high priority for DOL,” Greenberg said, citing declines in both the number of investigations and time spent on them by DOL. Further, Greenberg argued, the penalties imposed by DOL aren’t strong enough to deter corporations, especially large companies, from violating child labor law, and agriculture, an industry that employs an estimated half-million minors and poses some of the biggest dangers to working youth, sees disproportionately low enforcement.

Greenberg’s called for increases in DOL investigations and in penalties for violators, updated, tougher regulations, and investigations specifically into two industries: agriculture and meatpacking. Referring to recent investigations into child labor abuses at the Agriprocessors kosher meatpacking plant in Postville, Iowa, Greenberg urged DOL not to “look the other way,” as abusive employers have been revealed to do. “Given that meat processing plants tend to attract an impoverished, mostly immigrant work force, the possibility that child laborers may be employed in slaughterhouses around the nation should be investigated by U.S. DOL with vigor.”

Read the full statement submitted by NCL’s Greenberg, which contains further recommendations for DOL and legislators, as well as examples of the decline in enforcement.

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About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

‘Wild west’ prepaid calling cards industry unregulated and preying on poor, immigrant, military consumers – National Consumers League

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September 16, 2008

Contact: 202-835-3323, media@nclnet.org

Washington, DC – At a hearing of the U.S. House Energy and Commerce on HR 3402, the “Calling Card Consumer Protection Act” today, Sally Greenberg, Executive Director of the National Consumers League, said the largely unregulated industry was a “Wild West” and spoke in support of greater consumer protections in the purchase and use of prepaid calling cards. Greenberg commended the bill’s lead sponsor, Representative Eliot Engel (D-NY), and other supporters for their leadership in offering HR 3402.

“Prepaid calling cards are already a $4 billion industry, projected to grow to $6.4 billion,” Greenberg said. “Unfortunately, too many of the prepaid calling card companies engage in fraud and deceptive practices with the most vulnerable consumers falling prey. Consumers need more transparency and full disclosure as outlined in Congressman Engel’s bill.”

Greenberg added that the terms found in the fine print on the back of prepaid calling cards are unreasonable and one-sided. “Anytime you have an industry like this, with low barriers to entry and a totally unregulated market, you can be sure there will be unscrupulous operators who will take the money and run,” said Greenberg.

For the full statement submitted by NCL’s Greenberg, which contains a timeline of the growth of the prepaid card industry, examples of the outrageous fine print found on the backs of real prepaid calling cards, and more detailed policy recommendations.

Excerpts follow:

“The rapid growth of the prepaid calling card industry combined with, until recently, a lax enforcement of consumer protection statues at the state and federal levels, has enabled consumer fraud to flourish. Like so many other scams, the most frequent victims of the fraud and deception are the most vulnerable consumers: immigrants and the working poor; military families, and those lower income Americans who often cannot afford or obtain regular phone service, relying on calling cards to stay in touch with friends and loved ones in the US and abroad. Sadly, along with immigrants, military families are so often targeted for many scams and rip-offs we see at the National Consumer League’s Fraud Center.

Hispanic consumers may be losing up to $1 million per day because of fraudulent phone cards. Examples of fraudulent practices used by the prepaid companies include “hang-up fees,” periodic maintenance fees, destination surcharges, and high billing increments. Companies that try to “play by the rules” are often punished by a loss of market share due to fraudulent carriers.

While some state attorneys general have taken the lead in prosecuting fraudulent prepaid card companies, and the Federal Trade Commission has done commendable investigations and brought important cases against individual prepaid phone card providers, we need basic federal protections to stem the ongoing tide of the many deceptive practices in this industry. Only 11 states, including California, Connecticut, Florida, and Illinois, currently have laws pertaining to calling card fraud, specifically.

While HR 3402 requires disclosure of the name of the prepaid calling card service provider, we recommend that this section of the bill be expanded to include requiring the address of card originator and a toll free number, and that operators answering the phone be able to speak the language in which the card was advertised. The requisite disclosures should be in the same language. We also support requiring that the disclosure text on the calling card itself, packaging, or other promotional material (including online) be in same language used to advertise the card.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.