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Federal Communications Commission
Washington, D.C. 20554
In the Matter of File No. EB-10-TC-401
Touch-Tel USA, LLC NAL/Acct. No. 201132170027
Apparent Liability for Forfeiture FRN: 0018234609
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 26, 2011 Released: September 1, 2011
By the Commission:
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Touch-Tel USA, LLC ("Touch-Tel" or "Company") has apparently
willfully and repeatedly violated section 201(b) of the Communications
Act of 1934, as amended ("Communications Act" or "Act"), by
deceptively marketing prepaid calling cards. Based upon our review of
the facts and surrounding circumstances, Touch-Tel appears to target
its marketing to immigrants with claims that, for a card costing just
a few dollars, buyers can make hundreds of minutes of calls to their
native countries - when in fact, for that price, they will be able to
use only a fraction of those minutes, due to Touch-Tel's assessment of
multiple fees and surcharges that are not clearly and conspicuously
disclosed to consumers. Accordingly, we find that Touch-Tel USA, LLC
has apparently violated section 201(b) of the Act, and is apparently
liable for a proposed forfeiture in the amount of five million dollars
2. A prepaid calling card is a retail product for which the consumer pays
a specific dollar amount and which enables that customer to make
domestic and/or international telephone calls. Such cards are
frequently marketed to immigrant communities for calling a variety of
international destinations and are especially popular with these
communities, where many depend on prepaid calling cards to stay in
touch with family and friends in their home countries. The cards are
typically sold at retail in denominations of $2, $3, and $5 at
newsstands and in grocery and convenience stores. Companies often
market prepaid cards under a variety of brand names and advertise them
to consumers primarily using posters displayed in retail locations,
and in some cases, through radio and television advertising.
3. The Enforcement Bureau began its investigation of Touch-Tel by
directing a letter of inquiry to the Company requesting information
and documents relating to its prepaid calling card services. According
to its initial response, Touch-Tel buys minutes from various carriers
for the purpose of creating prepaid calling cards and establishes the
rates for its prepaid cards, including the rates, terms and conditions
for which minutes are deducted from the cards. Touch-Tel's calling
cards are distributed to retail vendors through wholesale
distributors. The retail vendors sell the cards to consumers using
marketing posters that Touch-Tel designs and distributes.
4. As part of its LOI response, Touch-Tel provided samples of the posters
and calling cards it sold in 2010 and 2011. A typical poster designed
and distributed by Touch-Tel includes the name of the calling card
(e.g., "Puro Central America," "Puro Mexico," "Ahora," and "La
Pelota"), the name of the telecommunications provider whose network
carries the calls, and representations about the number of minutes a
consumer will receive when calling various countries and/or cities.
The number of calling minutes listed on the sample of posters provided
by Touch-Tel usually appears in large font size and/or bright colors.
Additionally, the posters contain a large box listing various calling
destinations, along with the number of calling minutes a consumer will
receive to those destinations using the advertised calling card of a
specified dollar value (e.g., "Mexico Mty: GDL, DF 660 Minutes $2").
Appearing on the bottom of the posters is a disclosure in very small
font size relating to certain fees and surcharges that may apply when
using the cards including a per call service charge, and a biweekly
maintenance charge and other fees assessed when using toll-free access
numbers or calling from payphones.
5. Touch-Tel's calling cards themselves generally come in two parts: a
top portion (or "hang tag") and a bottom portion, the size of a credit
card, that can be separated from the top. The front of the cards
identifies the name and value of the card (e.g., $2 or $5). The back
of the top portion of the cards includes a disclosure about fees - the
same disclosure that typically appears on its posters. For example,
the disclosure on Touch-Tel's $5 Puro Mexico calling card, as
translated into English, reads as follows:
The published minutes shall apply only to the first call from a private
phone and are subject to change without notice. The charges made **after
the first call include $1.09 bi-weekly maintenance fee and a service
charge of up to $ 1.50 per call. All calls made **from a payphone will
incur a $ .99 charge. All calls connected via an 800 number will be
subject to a maximum charge of $.05 per minute. All call minutes are
rounded up to the next minute. The card expires on the date indicated on
the card or 180 days from first use.
The back of the bottom portion of the card contains a series of local
access numbers, a toll-free access number, and a customer service number.
A. Apparent Violation of Section 201(b) of the Act
6. Section 201(b) of the Act states, in pertinent part, that "[a]ll
charges, practices, classifications, and regulations for and in
connection with [interstate or foreign] communication service, shall
be just and reasonable, and any such charge, practice, classification,
or regulation that is unjust or unreasonable is declared to be
unlawful." The Commission has found that unfair and deceptive
marketing practices by interstate common carriers constitute unjust
and unreasonable practices under section 201(b). A practice that
"convey[s] insufficient information as to the company's identity,
rates, practices, and range of services" may constitute a violation of
section 201(b). Thus, a carrier that fails sufficiently to convey
material information, such as rates, about its prepaid calling card
services violates section 201(b) of the Act.
7. We find that Touch-Tel apparently has violated section 201(b) of the
Act because it deceptively represents that buyers of its cards can use
hundreds of minutes to make calls to foreign countries for just a few
dollars. In truth and in fact, buyers can use only a fraction of those
minutes for calls because Touch-Tel applies a variety of fees and
surcharges that quickly deplete the card. Touch-Tel purports to
disclose these fees and surcharges, but the fine print "disclosures"
contradict the express and much more prominent claims in the main
portion of the marketing materials. Moreover, even if the disclosures
of the various fees and surcharges were not contradictory, they are in
small print and not clear or conspicuous in relation to the claim of
total available minutes displayed in large type that the disclosure is
intended to modify, and the disclosure otherwise "convey[s]
insufficient information as to the company's identity, rates,
practices, and range of services."
8. Touch-Tel uses posters displayed in retail locations as its primary
vehicle for marketing its prepaid calling card services to consumers.
As indicated above, Touch-Tel represents on its posters that consumers
who purchase its cards will receive a specified number of calling
minutes to specific countries or cities for a set price (e.g., to
"Mexico: Mty, GDL, DF 660 Minutes for $2; 1500 minutes for $5").
Although Touch-Tel's prepaid cards are often marketed as providing
hundreds of minutes, the total number of minutes actually received by
the consumer is significantly less once the various fees are applied,
and if the consumer attempts to use the card to make multiple calls.
In fact, when applied after the first call, Touch-Tel's fees and
surcharges wipe out all remaining minutes on its $2 calling cards.
9. Touch-Tel's marketing materials and cards make certain disclosures
about these fees, but they conflict with the express statements of how
many calling minutes are available, and they are not adequate to
counter the express and otherwise unqualified claim that consumers
will be able to make hundreds of minutes of calls for the marketed
rate. As a preliminary matter, the font size of the advertised minutes
and rate information completely dwarfs the disclosure. As described
above, Touch-Tel's posters typically advertise the number of calling
minutes offered to certain countries in large, colorful, simple text,
which is prominently displayed at the top or center of the poster.
This information is not qualified in any way; i.e., there is no
suggestion that the consumer will receive "up to" the specified number
of minutes, and no indication that the consumer must read the small
print at the bottom in order to determine what he or she is actually
purchasing. The main part of the poster stands in stark contrast to
the disclosure regarding additional fees and surcharges, which is at
the bottom of the posters in significantly smaller type and easily
overlooked. While this same language is usually printed on the top
portion (or "hang tag") of Touch-Tel's cards, it is similarly printed
in extremely small font and difficult to read. Further, because the
calling card is meant to be torn away from the hang tag for ease of
carrying the card in a wallet and customer use, the disclosures on the
hang tag afford the consumer little information at the actual point of
use. Disclosures in fine print and in materials that reasonable
consumers may not read or use are ineffective to ensure that consumers
have an accurate and informed understanding of an advertising claim.
We therefore conclude that Touch-Tel's disclosures are not clear and
conspicuous to the average consumer.
10. Additionally, even if Touch-Tel's disclosures were more prominent, it
is difficult to calculate how the fees and surcharges will affect the
number of calling minutes offered. To illustrate this point, we use
the disclosure example in paragraph 5 above for Touch-Tel's $2 Puro
Mexico card, which is typical of the disclosures found in Touch-Tel's
marketing materials. First, despite advertising on its posters a
specific number of minutes for a set price, Touch-Tel includes a
disclosure that refers to a possible range of per call fees-the
maximum being $1.50 per call. There is no meaningful explanation of
how this range relates to the initial advertised rate or how it is
applied. The explanation of the amount of this fee is so vague that it
is impossible for a consumer to know when purchasing the prepaid card
what fee will actually apply to calls or how the fee will impact the
number of calling minutes received. Thus, this disclosure is not in
the "clear and unambiguous language" that the Commission has said is
needed to ensure that they are effective.
11. We also find Touch-Tel's description of fees associated with using 800
access numbers unclear and misleading. Touch-Tel's disclosures state
that "All calls connected via an 800 number will be subject to a
maximum charge of $.05 per minute" The card does not specify how this
range relates to the initial advertised rate or how it is applied. In
addition, Touch-Tel highlights its 800 access number in bold,
effectively encouraging the consumer to dial that number to access
service, rather than dial the local access numbers provided. Given
that a typical consumer would expect the 800 access number, like other
800 numbers, to be toll-free, this lack of clarity is particularly
misleading. We therefore find that Touch-Tel does not convey
sufficient information about its rates for the use of its 800 access
12. To give context to why these disclosures are inadequate and the extent
of the gulf between a consumer's reasonable expectation (based on
Touch-Tel's marketing materials) and the consumer's actual experience
(based on application of Touch-Tel's fees), consider the card that one
of Touch-Tel's posters advertises as offering 660 minutes of calling
to three areas in Mexico for $2. If a consumer calls these areas in
Mexico and speaks for 30 minutes, one would reasonably expect there to
be 630 minutes remaining on the card. However, the card disclosure
suggests that once the initial call is completed, a $1.09 bi-weekly
maintenance fee and a service charge of up to $1.50 apply. Thus, after
one 30-minute call, the potential post-call fees of $2.59 would
exhaust a card that was advertised to provide 660 minutes. According
to Touch-Tel, the "published minutes shall apply only to the first
call." In other words, the only possible way a consumer could use all
of the 660 advertised minutes would be to make a single 11-hour call
from a local access number - a duration so lengthy as to make such
calls highly improbable by the typical consumer. Even if the maximum
post-call fees were not charged, because Touch-Tel's disclosure only
contains a range of possible service charges, it would be impossible
for the consumer to determine at the point of sale what amount will
apply to each destination.
13. Information regarding the existence, amount, and application of fees
that affect the value of a calling card is material to consumers when
deciding to purchase cards. The failure to provide such information
clearly and conspicuously, because it deprives customers of material
information needed to make a purchasing decision, is a deceptive
marketing practice. As the Commission stated in NOS, if a consumer
must take a series of complicated and confusing steps to try to
calculate the charges and calling time based on the disclosure
provided, such disclosure almost certainly would be misleading to
consumers. Such a practice, then, would be unjust and unreasonable
under section 201(b).
14. We find that the marketing materials used by Touch-Tel to sell its
prepaid calling cards are misleading and deceptive regarding the rates
and charges applicable to its service offerings. In addition, we find
that Touch-Tel failed to disclose, in any meaningful way, material
information about its rates, charges and practices at the point of
sale, resulting in substantial harm to consumers who purchased its
prepaid calling cards. Accordingly, we find that Touch-Tel has
apparently engaged in unjust or unreasonable marketing practices in
violation of section 201(b) of the Act.
A. Proposed Forfeiture Pursuant to Section 503(b) of the Act
15. Section 503(b)(1) of the Act states that any person who willfully or
repeatedly fails to comply with any provision of the Act or any rule,
regulation, or order issued by the Commission, shall be liable to the
United States for a forfeiture penalty. Section 503(b)(2)(B) of the
Act authorizes the Commission to assess a forfeiture of up to $150,000
for each violation, or each day of a continuing violation, up to a
statutory maximum of $1,500,000 for a single act or failure to act by
common carriers. In determining the appropriate forfeiture amount, we
consider the factors enumerated in section 503(b)(2)(E) of the Act,
including "the nature, circumstances, extent and gravity of the
violation, and, with respect to the violator, the degree of
culpability, any history of prior offenses, ability to pay, and such
other matters as justice may require." Although the forfeiture
guidelines do not establish a forfeiture amount for unjust or
unreasonable practices, such as deceptive marketing practices, the
guidelines do state that, ". . . any omission of a specific rule
violation from the. . . [forfeiture guidelines]. . . should not signal
that the Commission considers any unlisted violation as nonexistent or
unimportant." The Commission retains the discretion to depart from the
guidelines and issue forfeitures on a case-by-case basis, under its
general forfeiture authority contained in section 503 of the Act.
16. In NOS, the Commission found that unfair and deceptive marketing
practices by interstate common carriers constitute unjust and
unreasonable practices within the meaning of section 201(b) of the
Act," and concluded that each instance of such practices constituted a
separate violation of section 201(b). The Commission noted that it had
previously assessed a forfeiture amount of $40,000 for each instance
in which a carrier engaged in an unjust and unreasonable telemarketing
practice in violation of section 201(b). It explained, however, that
"a straightforward application of a $40,000 base forfeiture amount
would likely produce a proposed forfeiture in the millions of
dollars." Rather, taking into account the number of violations
attributed to the two companies involved in the case, the Commission
determined that a $500,000 forfeiture amount per company was
sufficient to protect the interests of consumers and to deter future
violations of the Act.
17. We find that each card that Touch-Tel marketed using deceptive
advertising constitutes an independent unjust and unreasonable
practice, and thus a separate and distinct apparent violation of
section 201(b) of the Act. Given the thousands of cards that
Touch-Tel appears to have marketed, there appears to be an extensive
number of apparent violations in this case for which the Commission is
empowered to assess a penalty. While the proposed forfeiture is higher
than the proposed forfeiture in NOS, weighing the facts before us, and
taking into account the extent and gravity of Touch-Tel's egregious
conduct, as well as its culpability and information in the current
record about its revenues, we find that a total proposed forfeiture
amount of $5,000,000 is appropriate under the specific circumstances
of this case. Touch-Tel appears to have marketed thousands of cards
within one year of the instant NAL alone and charged millions of
dollars to consumers over that time period through its deceptive
marketing practices. The proposed forfeiture clearly must protect the
interests of consumers and serve as an adequate deterrent. A lesser
penalty would be inappropriate in light of Touch-Tel's failure to
adequately provide material information about its rates to thousands
of consumers who purchased the Company's prepaid cards. Moreover, in
determining the amount of a proposed penalty, we seek to "guarantee
that forfeitures issued against large or highly profitable entities
are not considered merely an affordable cost of doing business." While
we could propose a higher forfeiture based on Touch-Tel's reported
2010 revenues, we believe the forfeiture we propose today is
sufficient to protect the interests of consumers and serve as an
adequate deterrent. In the event Touch-Tel continues to engage in
conduct that apparently violates section 201(b)'s prohibition against
unjust and unreasonable practices, such apparent violations could
result in future NALs proposing substantially greater forfeitures and
revocation of Touch-Tel's operating authority. Other prepaid calling
card providers are also on notice that practices such as those engaged
in by Touch-Tel are unjust and unreasonable, and that we may propose
more significant forfeitures in the future as high as is necessary,
within the range of our statutory authority, to ensure that such
companies do not engage in deceptive marketing practices.
18. We have determined that Touch-Tel USA, LLC apparently violated section
201(b) of the Act. We have further determined that Touch-Tel USA, LLC
is apparently liable for a forfeiture in the amount of five million
V. ORDERING CLAUSES
19. Accordingly, IT IS ORDERED that, pursuant to section 503(b)(2)(B) of
the Communications Act of 1934, as amended, 47 U.S.C. S: 503(b)(2)(B),
and section 1.80 of the Commission's rules, 47 C.F.R. S: 1.80,
Touch-Tel USA, LLC is hereby NOTIFIED of this APPARENT LIABILITY FOR
FORFEITURE in the amount of $5,000,000, for willful and repeated
violations of section 201(b) of the Act, 47 U.S.C. S: 201(b).
20. IT IS FURTHER ORDERED that, pursuant to section 1.80 of the
Commission's rules, within thirty (30) days of the release date of
this Notice of Apparent Liability for Forfeiture, Touch-Tel USA, LLC
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
21. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission. The
payment must include the NAL/Account Number and FRN referenced above.
Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Touch-Tel USA, LLC will also
send electronic notification to Johnny.Drake@fcc.gov on the date said
payment is made. Requests for full payment under an installment plan
should be sent to: Chief Financial Officer -- Financial Operations,
445 12th Street, S.W., Room 1-A625, Washington, D.C. 20554. Please
contact the Financial Operations Group Help Desk at 1-877-480-3201 or
Email: ARINQUIRIES@fcc.gov with any questions regarding payment
22. The response, if any, must be mailed both to: Marlene H. Dortch,
Secretary, Federal Communications Commission, 445 12th Street, SW,
Washington, DC 20554, ATTN: Enforcement Bureau - Telecommunications
Consumers Division; and to Richard A. Hindman, Division Chief,
Telecommunications Consumers Division, Enforcement Bureau, Federal
Communications Commission, 445 12th Street, SW, Washington, DC 20554,
and must include the NAL/Acct. No. referenced in the caption.
Documents sent by overnight mail (other than United States Postal
Service Express Mail) must be addressed to: Marlene H. Dortch,
Secretary, Federal Communications Commission, Office of the Secretary,
9300 East Hampton Drive, Capitol Heights, MD 20743. Hand or
messenger-delivered mail should be directed, without envelopes, to:
Marlene H. Dortch, Secretary, Federal Communications Commission,
Office of the Secretary, 445 12th Street, SW, Washington, DC 20554
(deliveries accepted Monday through Friday 8:00 a.m. to 7:00 p.m.
only). See www.fcc.gov/osec/guidelines.html for further instructions
on FCC filing addresses.
23. The Commission will not consider reducing or canceling a proposed
forfeiture in response to a claim of inability to pay unless the
petitioner submits: (1) federal tax returns for the most recent
three-year period; (2) financial statements prepared according to
generally accepted accounting practices; or (3) some other reliable
and objective documentation that accurately reflects the petitioner's
current financial status. Any claim of inability to pay must
specifically identify the basis for the claim by reference to the
financial documentation submitted.
24. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by Certified Mail Return Receipt
Requested and First Class mail to Touch-Tel USA, LLC, Attention:
Amanuk Syed, President and Chief Executive Officer; Gary Gill, Chief
Financial Officer; and William Stankos, Chief Operating Officer, 5444
Westheimer Road, Suite 1535, Houston, TX 77056.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Touch-Tel is a Texas corporation, whose principal address is 5444
Westheimer Road, Suite 1535, Houston, TX 77056. Amanuk Syed, President and
Chief Executive Officer; Gary Gill, Chief Financial Officer; and William
Stankos, Chief Operating Officer; are listed as contact persons for
Touch-Tel. Accordingly, all references in this NAL to "Touch-Tel" also
encompass the foregoing individuals, and all other principals and officers
47 U.S.C. S: 201(b).
See Letter from Colleen Heitkamp, Chief, Telecommunications Consumers
Division, Enforcement Bureau, Federal Communications Commission, to
Touch-Tel USA, LLC, April 2, 2010 ("LOI").
See Touch-Tel's response received by the Commission on, May 3, 2010
("Response") at 1.
See email from William Stankos to David Marks, Enforcement Bureau, Federal
Communications Commission, April 1, 2011 ("Supplemental Response"). See
also Response, compact disk attachment.
See, e.g., Puro Mexico poster, Supplemental Response, attachment.
The disclosure is in Spanish and reads "Los minutos publicados se
aplicaran solo en la primera llamada solamente desde un telefono privado y
seran sujetos a cambiar sin previo aviso. Los cargos realizados despues de
la primera llamada incluyen $1.09 quincenalmente por cargo de
mantenimiento y, un cargo por el servicio de hasta $1.50 en cada llamada.
Todas las llamadas realizadas desde un telefono publico seran sujetos a un
cargo de $.99. Todas las llamadas conectadas por medio de un numero 800,
seran sujetos a un cargo adicional maximo de $.05 por minuto. Todas las
llamadas se redondean al proximo minuto inmediato. La tarjeta expira en la
fecha indicada en la tarjeta o a los 180 dias del primer uso. See id.
See, e.g., Puro Mexico card, Supplemental Response, attachment.
47 U.S.C. S: 201(b).
See, e.g., NOS Communications, Inc., Notice of Apparent Liability for
Forfeiture, 16 FCC Rcd 8133 (2001) ("NOS") (finding that the companies
engaged in deceptive marketing of their interstate communication services
by failing to disclose clearly and conspicuously material facts regarding
their promotional plan offerings and pricing methodology, in violation of
section 201(b)); Business Discount Plan, Inc., Order of Forfeiture, 15 FCC
Rcd 14461 (2000) ("BDP"), recon. granted in part and denied in part, 15
FCC Rcd 24396 (2000) (finding that the company violated section 201(b) by
using unjust and unreasonable telemarketing practices such as
misrepresenting the nature of its service offerings); Telecommunications
Research & Action Center & Consumer Action, Memorandum Opinion and Order,
4 FCC Rcd 2157 (Com.Car.Bur. 1989) ("TRAC") (recognizing that section
201(b) provides a cause of action against carriers for failing to convey
sufficient information about their rates, practices and range of
services). See also Joint FCC/FTC Policy Statement For the Advertising of
Dial-Around And Other Long Distance Services To Consumers, 15 FCC Rcd 8654
(2000) ("Joint Advertising Statement").
See TRAC, 4 FCC Rcd at 2159. The full Commission has approvingly cited
this passage from TRAC as indicating that such conduct violates section
201(b) of the Act. BDP, 15 FCC Rcd at 14469.
TRAC, 4 FCC Rcd at 2159.
While Touch-Tel's disclosure states that the "[t]he published minutes
shall apply only to the first call," none of its cards or posters supply
the rates after the first call making it impossible at the point of sale
for the consumer to know how many minutes will remain on the card after
the first call is completed.
A card is exhausted when either its face value has been used up (e.g.,
$2), or when all of the available minutes have been used. For a discussion
of how the fees may impact the value of the card as it is used, see infra
Both academic research and the Commission's experience with consumer
issues have demonstrated that the manner in which providers display
material information, including the charges, classifications, and terms of
use, can have as much impact on a consumer's decision to make a purchase
as the information itself. See generally Colin Camerer, Samuel
Issacharoff, George Loewenstein, Ted O'Donoghue & Matthew Rabin,
Regulation for Conservatives: Behavioral Economics and the Case for
"Asymmetric Paternalism," 151 U. Penn. L. Rev. 1211 (2003) (surveying
regulatory strategies to address problems arising from systematic errors
in consumer decision-making); Richard H. Thaler and Cass R. Sunstein,
Nudge, Yale University Press 2008 (concluding that information buried deep
in the "fine print" is far less useful to consumers than information
displayed clearly and prominently). See also Joint Advertising Statement,
15 FCC Rcd at 8654-55 (finding that if consumers are deceived by
advertising claims, they cannot make informed purchasing decisions);
Truth-in-Billing and Billing Format, First Report and Order and Further
Notice of Proposed Rulemaking, 14 FCC Rcd 7492 (1999) (noting that the
proper functioning of competitive markets is predicated on consumers
having access to accurate, meaningful information in a format that they
See, e.g., Solo Latino poster, Puro Mexio poster, and Confia poster,
Supplemental Response, attachment.
See, e.g Puro Mexico calling card, Supplemental Response, attachment.
Joint Advertising Statement, 15 FCC Rcd at 8663 (noting that prominence,
proximity, and placement of disclosure in comparison to advertising
representation affect effectiveness of disclosure); id. at 8659 (noting
that disclosure about limitations on advertised long-distance rate likely
ineffective when advertised rate appeared on peel-off stickers, without
disclosure, that consumers were supposed to put on telephones).
Because the fee for calling an 800 number is "up to $.05," the consumer
has no way of knowing when the card will be exhausted when an 800 number
Joint Advertising Statement, 15 FCC Rcd at 8662.
See, e.g. Puro Mexico prepaid card and poster, Supplemental Response,
Dialing a local access number could result in charges to the consumer by
the consumer's telephone company (if, for example, the number was a
regional toll number), but would not reduce the available minutes on the
See Puro Mexico prepaid card and poster, Supplemental Response,
See NOS, 16 FCC Rcd at 8138 (2001).
47 U.S.C. S: 503(b)(1)(B). See also 47 C.F.R. S: 1.80(a)(2).
47 U.S.C. S:503(b)(2)(B). See also 47 C.F.R. S: 1.80(b)(2). In 2008, the
Commission amended section 1.80(b)(2) of the rules, 47 C.F.R. S:
1.80(b)(2), to increase the maximum forfeiture amounts in accordance with
the inflation adjustment requirements contained in the Debt Collection
Improvement Act of 1996, 28 U.S.C. S: 2461. See Amendment of Section 1.80
of the Commission's Rules and Adjustment of Forfeiture Maxima to Reflect
Inflation, Order, 23 FCC Rcd 9845, 9847 (2008) (adjusting the maximum
statutory amounts for common carriers from $130,000/$1,300,000 to
47 U.S.C. S: 503(b)(2)(E).
See Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules
to Incorporate Guidelines, Report and Order, 12 FCC Rcd 17087, 17099, P:
22 (1997) ("Forfeiture Policy Statement"); recon. denied, 15 FCC Rcd 303
See NOS, 16 FCC Rcd at 8133, 8142.
See id. at 8141-8142 (citing Business Discount Plan, Inc., Apparent
Liability for Forfeiture, 15 FCC Rcd 14461 at 14471-72 (2000)).
Id. at 8142.
In NOS, the Commission found that "each rate sheet sent to consumers
constitutes a separate violation of section 201(b)." NOS, 16 FCC Rcd at
8133. Consistent with NOS, we find that the marketing of each card to
consumers constitutes a separate apparent violation of section 201(b). See
also BDP, 15 FCC Rcd at 14471-72 (assessing a forfeiture amount of $40,000
for each instance in which the carrier engaged in an unjust and
unreasonable telemarketing practice in violation of section 201(b)).
The $5 million penalty we propose is equivalent to applying a $40,000
penalty to 125 apparent violations that occurred within one year of this
NAL, but Touch-Tel's conduct involves a considerably higher number of
violations during the actionable time period.
See Forfeiture Policy Statement 12 FCC Rcd 17087, 17099.
See Touch-Tel 2011 FCC Form 499-A (Telecommunications Reporting Worksheet
(Reporting Calendar 2010 Revenues)).
47 C.F.R. S: 1.80.
(Continued from previous page)
Federal Communications Commission FCC 11-132
Federal Communications Commission FCC 11-132