Well it looks like Clifton Telecard Alliance (CTA) is being chased down by the Federal Trade Commission (FTC) for the misrepresentation of the number of calling minutes consumers get on their cards. CTA seems to be have been singled out in this particular case due to it's size and dominance in the calling card market with the FTC claiming CTA had sales of $28 million alone in just the last quarter of 2007.
The FTC cite one card which was supposed to deliver 40 minutes of calling time to El Salvador (according to the poster) and cut the call off after only 27 minutes. In all the FTC purchased 46 different CTA cards and claim none of the cards delivered the total advertised minutes.
The FTC has asked that the court demand that the company halt these practices while the case awaits trial and they have also asked for a court appointed monitor to oversee the business to make sure the process doesn't continue. The trial date has yet to be set but the FTC is trying to do as much in their power to curb this companies practices even before their day in court.
Unfortunately I don't think CTA is the one mandating the number of minutes given on a card! All distributors would love to have cards that deliver the true amount of minutes (although insanely high) but the carriers are the ones who play the games.
Just a warning to all phone card providers and distributors this is probably the first of many of these types of suits. The movement in Washington is to crack down on the calling card companies deceptive minute practices and is in large part thanks to the heavy lobbying IDT has undertaken as of late to clean up their business!
Here is a link to the The full FTC complaint against CTA
Friday, March 28, 2008
Federal Trade Commission Takes on Clifton Telecard Alliance
Writer: Phone Card Advertising:
Labels: Distribution, Legal
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3 comments:
The phone card market is a very cut throat business so I don't think that CTA will purposely advertise less then what they give. The purpose of the market is to be the most reliable card out there and CTA does that. To make my point the only thing the FTC wants is to fine them and make some money. When really the FTC should really go after the other wholesalers like Locus, STI, IBASIS and MTC.
The reason the FTC won't go after service providers like Locus, STI, Ibasis is because they can't! They do not have the jurisdiction to do so, the FCC is the group that regulates telecom providers.
As for the statement about the purpose of CTA is to make the most reliable card, it was always about who could advertise the most minutes not who could deliver what they advertise. However, maybe with the FTC crack down and some pressure by service providers we can finally get to the process of delivering quality cards.
The consumers know what they want. They WILL settle for a card thats gives less mins if its reliable and gives min for min. The consumers nowadays will be able to tell which major distributor stands behind the card. Advertising the most mins does play a part only to people who does not buy a lot of cards, but to those people who are heavy card buyers want the most reliable.
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