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   September 1, 2011  David Fiske (202) 418-0513



                             PREPAID CALLING CARDS

   Customers from minority and low-income communities most affected; Millions
     of dollars lost in alleged scams that allowed customers to use only a
                       fraction of minutes they purchased

   (Washington, D.C.) - The Federal Communications Commission today proposed
   forfeitures totaling $20 million from STi Telecom Inc. (formerly Epana
   Networks, Inc.), Lyca Tel, LLC, Touch-Tel USA, LLC and Locus
   Telecommunications, Inc. for apparently violating the Communications Act
   by using deceptive marketing practices to sell prepaid calling cards,
   scamming consumers out of millions of dollars, mostly from low-income and
   minority communities. The FCC is proposing $5 million in forfeitures for
   each company.

   Under Commission precedent, unfair and deceptive marketing is an unjust
   and unreasonable practice that violates section 201(b) of the
   Communications Act. In today's cases, the Commission found that the
   apparent violations were particularly egregious. Each of the companies
   involved had made claims that, with a card costing only a few dollars,
   buyers can make hundreds if not thousands of minutes of calls to foreign
   countries - when in fact, because of the multiple fees and surcharges
   assessed, they will be able to use only a fraction of those minutes.
   Moreover, the Commission found that the companies apparently did not
   clearly and conspicuously disclose the fees to consumers.

   In one case, the FCC's investigation revealed that a consumer would have
   to make a single 13-hour long call in order to receive the hundreds of
   advertised minutes.  If the consumer made more than one 13-hour call, then
   the consumer would begin to receive smaller and smaller fractions of the
   card value.  In other cases, a card that purported to offer 1,000 minutes
   was exhausted after a single 60 minute call.  And another card that was
   advertised for 400 minutes of talk time could be exhausted after a single
   15 minute call.  Over the past year, the companies named each marketed
   thousands of such prepaid calling cards to unwitting consumers, many of
   whom rely on prepaid calling cards to communicate with loved ones outside
   the U.S.  As a result, consumers already struggling in a difficult economy
   were bilked out of millions of dollars.    

   FCC Enforcement Bureau Chief Michele Ellison said:  "Every day, people -
   many of them from our most vulnerable communities - rely on prepaid
   calling cards to connect with friends and family around the world. The
   orders released today detail the misleading practices -- from illegible
   fine print to impossible-to-calculate fees - that some companies appear to
   use to sell their cards. We hope that these cases lead all prepaid card
   providers to reexamine their marketing practices to ensure that they are
   treating consumers fairly."

   Because these enforcement actions reveal apparent widespread patterns of
   deceptive activity, the Commission today also released an Enforcement
   Advisory on this topic to alert consumers to be careful when choosing
   prepaid calling cards, and to warn companies that the FCC will continue to
   vigorously pursue those companies that engage in deceptive marketing.  The
   Advisory is available at

   For further information, contact Richard A. Hindman at (202) 418-7320.
   Please direct media inquiries to David Fiske at (202) 418-0513. News and
   other information about the FCC is available at




   Federal Communications Commission

   445 12th Street, S.W.

   Washington, D. C. 20554

   This is an unofficial announcement of Commission action. Release of the
   full text of a Commission order constitutes official action.

   See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

                                        News Media Information 202 / 418-0500


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