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The Federal Trade Commission has told the U.S. House Subcommittee on Commerce, Trade and Consumer Protection of the Committee on Energy and Commerce that it's cracking down on the deceptive marketing of prepaid phone cards. 

The Commission vote approving the testimony was 4-0. FTC (News - Alert) officials said pending legislation would give the agency “stronger tools to combat the problem.” 

Lois Greisman, Associate Director of the FTC’s Division of Marketing Practices, said that in 2009 the FTC obtained court orders settling two cases against major distributors of prepaid calling cards, imposing judgments of more than $3.5 million for deceiving consumers about the number of calling minutes that their cards provide. FTC testing showed the cards had about half the advertised calling time. 

The FTC has established a joint federal-state task force, which includes representatives from the offices of more than 35 state attorneys general and other state and local agencies, to combat deceptive marketing practices in the prepaid calling card industry. 

In addition, the testimony reiterates the FTC’s support for repeal of a statutory provision that limits the FTC’s authority to take action against telecommunications service providers. Evidently common carriers subject to the Communications Act currently are exempt from the FTC Act’s prohibitions on unfair or deceptive acts and practices.  

In October TMC reported on the VoIP calling card market, one of the most lucrative industries in the market today, especially in countries where there is a great need for international calling: The DORETEL Hosted PortaOne (News - Alert) Calling Card Solution allows entrepreneurs and service providers to offer their own international calling card services. In addition, companies and individuals have shifted their services to a prepaid basis so they can take advantage of the cost-effective solutions that Voice over IP has to offer.