Last week, the FCC decided not to reduce the $20 million in fines it levied against four pre-paid calling card companies in 2015. The fines arise out of the companies’ deceptive marketing practices whereby they marketed calling cards that would provide thousands of minutes for low, prepaid prices. The FCC found, however, that consumers were required to use all of their minutes in a single call to avoid the hidden fees and surcharges that were not conspicuously displayed on the companies’ marketing materials.
To assert jurisdiction, the FCC categorized the companies as common carriers primarily because the companies set calling card rates and minutes, designed and printed calling cards, and because the cards provided international toll voice service—a common carrier activity requiring authorization under Section 214 of the Communications Act.
Takeaways: Advertisers that sell prepaid calling cards or similar services should clearly and conspicuously disclose the costs associated with their services on marketing materials.