One of the biggest telephone calling card distributors in the country agreed to pay $1.3 million to settle a federal lawsuit accusing the firm of shorting immigrants and lower-income users their promised time -- often by half. Some users also were charged for calls that were never connected, the Federal Trade Commission said.
Clifton Telecard Alliance One and its principal Mustafa Qattous also agreed to pay more than $24 million if the company failed to comply with the terms of the settlement, which require considerably more honesty than the practices described in the lawsuit.
Selling cards with such brand names as "Hello Africa" and "CTA Mexico," the company largely appeals to immigrants who want to call relatives back home. What many didn't know when buying the cards was that some were single-use, or delivered considerably fewer minutes than advertised.
Under the agreement, CTA will have to provide a full disclosure of the terms of the cards, so consumers don't find out later that they've been taken advantage of. Calling card users are assessed a variety of fees, including for using the card more than once, and don't find out until after their call how much of their buy-in was expended beyond the time on the phone.
The FTC settled with another company over similar charges in February.
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