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TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has reached a settlement with a major provider of international prepaid calling cards in Florida over marketing practices related to the company’s calling cards. Locus Communications, Inc. must now fully deliver the total amount of long distance telephone minutes as advertised and disclose all applicable fees and charges. The settlement also provides for a total of $105,000 for The Hispanic Institute, which assisted the Attorney General’s Office with its investigation into the prepaid calling card industry.

“Many Florida residents use these cards to communicate with their family, friends and loved ones,” said Attorney General McCollum. “These new standards will protect that essential bond of communication.”

An investigation by the Attorney General’s Economic Crimes Division determined Locus, a telecommunications service provider, offered “unlimited” minutes which were not actually unlimited. The company also rounded up calls to three-minute increments, failed to specifically disclose actual amounts of fees and surcharges, and on at least one poster, advertised in Spanish but printed the fees and surcharges disclaimer in English.

Locus is the 13th company to reach a settlement with the Attorney General over issues related to the prepaid calling card industry. The agreement requires the company to cease any potentially deceptive advertisements, provide 100 percent of the minutes advertised, and submit to three years of auditing by the Attorney General’s Office to ensure that it is following the terms of the agreement. Further, as part of the settlement agreement, the company will provide funding of $35,000 per year for three years to The Hispanic Institute to support its investigative and monitoring efforts in this industry.

“On behalf of Hispanics who use these prepaid calling cards, we would like to thank Attorney General Bill McCollum for his work in protecting consumers,” said Gus West, president of the Hispanic Institute. “This settlement will allow The Hispanic Institute to continue to conduct independent, empirical, and objective testing to determine if the prepaid calling cards are providing the amount of minutes being advertised by the providers.”

The Attorney General’s Economic Crimes Division reached this agreement as a result of a continued investigation of the prepaid calling card industry. Prior to the investigation, consumers complained that companies within the industry often utilized hidden or inadequately disclosed fees and charges such as “hang-up fees,” periodic maintenance fees and destination surcharges.
The Economic Crimes Division is still investigating other companies that have been allegedly engaging in similar deceptive and unfair trade practices. Consumers affected by these or other practices may file a complaint by visiting the Attorney General’s website at http://www.myfloridalegal.com or by calling the fraud hotline at 1-866-966-7226.