Phone Cards and Pending Legislature - Nothing New!

As you read in two of my earlier posts two government officials, Congressman Eliot Engel from New York and Florida Attorney General Bill McCollum, have recently taken up the fight against the "corrupt practices" of the prepaid calling card industry. Spurred on most likely by the recent lawsuit by IDT against it's competitors and the accompanying press that this brought to the industry (NY Post Article and the recent Business Week story).

It's not the first time that the industry has been investigated by government officials but what makes this time different is that one of the industries own is leading the charge. While it looks like the only thing that will change is that calling card companies will just have to write down longer disclaimers, the "standard practices" probably won't change much! Customers demand lower rates and the only way to get "your slice of the pie" is advertising the lowest possible rate even if the fees have to be high to get to that rate.

The fact of the matter that the once lucrative business is drying up... I like to use the analogy, it's like putting a bunch of lawyers in a room and telling them the guy in the corner is the only potent ital customer they have left! They will beg borrow and steal to get that guys business! It's the bad side of the business but I guess my point is that the current behavior is not unique to the calling card business.