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                                  STATEMENT OF

                               P. MICHELE ELLISON

                           CHIEF, ENFORCEMENT BUREAU

                       FEDERAL COMMUNICATIONS COMMISSION

                                  May 8, 2012

   Every day, millions of Americans-many from our most vulnerable minority
   and immigrant communities-rely on prepaid calling cards to stay in touch
   with family and friends around the world. Sadly, these consumers often
   don't get what they paid for. So, thank you, Consumer Reports, for
   bringing further attention to the problems in the prepaid calling card
   market.

   The FCC is committed to strong, consistent enforcement action in this
   area. We have sent a clear message that misleading consumers doesn't pay
   and won't be tolerated. Over the last nine months, the FCC has taken
   aggressive enforcement action, proposing $25 million in penalties against
   five prepaid card companies.

   In each case, we found a disturbing trend-the use of redundant fees, "fine
   print," and vague descriptions that could cause prepaid cards to be
   exhausted after only a tiny fraction of the advertised minutes had been
   used. For instance, in one case, a card advertised hundreds of minutes,
   but what the unsuspecting consumer didn't know is that a caller could only
   get all of those minutes by making a single 13-hour call.

   As I said when we took the first enforcement actions last summer, prepaid
   card providers should re-evaluate their business and marketing practices
   consistent with our Enforcement Advisory.

   I am encouraged by the recent formation of an industry association that
   may develop best practices in this area. Nevertheless, the FCC's
   Enforcement Bureau will remain vigilant in its pursuit of those who seek
   to mislead and deceive consumers. We will diligently pursue new
   investigations of past misconduct. And, we will not hesitate to take
   additional enforcement action where warranted.

   We want to hear from you. Anyone who uses a prepaid card that does not
   deliver as advertised or that includes hidden charges and fees should
   contact the FCC by telephone, the Internet, or mail. Today, we also issued
   another  Enforcement Advisory
   with a Consumer Alert (attached) urging
   consumers to be smart and selective about prepaid calling card purchases.
   In addition, our consumer guide (in English and en espanol) and tip sheet
   on prepaid cards, which I've shared with Consumer Reports, list simple
   steps consumers can take to identify, prevent, and help fight deceptive
   marketing of prepaid cards.

   Together, we can bring an end to predatory, prepaid calling card schemes.