Recent Legal Developments Affecting the Prepaid Calling Card Industry

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The Federal Trade Commission and several States have initiated legal proceedings to address alleged illegal practices taking place within the prepaid calling card industry. These new efforts, which directly follow a lawsuit filed by IDT Telecom, Inc. against rival prepaid calling card providers, are aimed primarily at stopping the practice of selling cards which deliver fewer minutes than advertised. In addition, the FTC and States have begun to target prepaid calling card providers who fail to satisfactorily disclose surcharges and fees that may count against the number of advertised minutes.

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