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Attorney General Lockyer Reminds Consumers of New Protections Against Deceptive Marketing of Prepaid Phone Cards

Tuesday, July 1, 2003
Contact: (415) 703-5837

SACRAMENTO) – Attorney General Bill Lockyer announced that under a new law that becomes fully operational today, prepaid phone card users will enjoy better customer service and stronger legal protections against hidden fees and charges.

"This law has a simple premise: Consumers should be fully informed about a product before they buy it," said Lockyer. "Starting today, all marketers of these cards are specifically required to fully disclose to consumers all fees, surcharges and limitations on service. Californians who speak limited English will particularly benefit from the new safeguards because these cards have been aggressively marketed in their communities."

The Legislature and Governor last year enacted the reforms, which Lockyer supported. Cards in compliance with less-stringent disclosures required under previous law still could be sold through yesterday. As of today, however, all cards must comply with the new, tougher disclosure mandates.

Under the reforms (AB 2244 by former Assemblyman Howard Wayne, D-San Diego), prepaid phone card sellers will be prohibited from surprising card purchasers with extra hidden fees and charges. Additionally, sellers must have customer service available 24 hours a day, at no charge. If a company advertises its cards in a language other than English, the disclosures and customer service must be available in the same language.

Advertisements for cards must fully disclose any limitations on claims made about the rate ("only 5 cents a minute") or amount of service ("100 minutes"). The store display, and either the card or its packaging, must disclose:

The value of the card.

All fees, surcharges and access fees for calls within the United States.

Minimum per-call charges.

"Rounding up" times.

Policies for refunds, recharges and expiration.

The toll-free customer service number.

A full description of the new requirements is available at the Attorney General's web site at http://www.ag.ca.gov/consumers/general/phone_card.htm.

Consumers who believe a seller is not complying with the new prepaid phone card law should contact the Public Inquiry Unit of the Attorney General's Office, P.O. Box 944255, Sacramento, CA, 94244-2550, or file a complaint online at the Attorney General's web site at http://www.ag.ca.gov/consumers/mailform.htm.

For prepaid cards used to make calls within California, consumers who experience service quality problems, such as poor connections or dropped calls, can file a complaint with the California Public Utilities Commission by sending an email to consumer-affairs@cpuc.ca.gov or by calling 800-649-7570. Service problems with calls to other states or countries can be reported to the Federal Communications Commission, http://www.fcc.gov/cgb/complaints.html or 888-225-5322.

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