September 29th, 2009 posted by Alex Drewniak

STOCKHOLM, Sweden – September 29, 2009 Relentless fraud by the billion-dollar prepaid calling card industry – on- and offline – has prompted the Internet phone company, Rebtel to slash in half its rates to Mexico so Mexicans living in the U.S. can call friends and family at home for just 1.5 cents per minute.

“I switched to Rebtel because I was sick of being ripped-off by calling cards,” said Marcos González, a Monterrey, Mexico native who now lives and works in Houston, Texas. González answered a Rebtel survey this month that showed 79 percent of participants believe they had consistently received fewer minutes than promised by calling card providers.

The Federal Trade Commission, as part of a national crackdown, has sued and received multi-million judgments this year against some of the worst offenders, such as Diamond Phone Card, Inc., that claimed to deliver 400 minutes to Mexico but only provided 106 minutes of calling time after fees and service charges.

“If the calling card functions at all, it may only work for a fraction of the promised time,” the consumer advocacy group Consumer Action recently told the Pittsburgh Post-Gazette.

Characterizing fraud and abuse “epidemic” in the prepaid phone industry, the San Francisco, CA-based group cited a U.S. Senate report that found the average card delivered only 50 percent of the promised minutes, largely because of undisclosed or poorly disclosed terms and fees, such as a 99-cent hang-up fee, or the practice of billing in 3- or 4-minute increments even when calls only last a few seconds.

The Hispanic Institute, a nonprofit advocacy group, estimates that calling cards are cheating consumers out of $1 million a day.

In contrast, there is no charge to set up a Rebtel account. No monthly fees. No connection fees. No hidden costs.

“Fraud is fraud – whether it’s done with a paper card or on the Internet,” said Rebtel CEO Andreas Bernstrom. “With Rebtel, what you pay is exactly what you get when calling Mexico – 1.5 cents per minute to landlines and 8.9 cents per minute to mobiles phones. Absolutely nothing else.”

Rebtel works with any phone – even the most simple, cheap mobile phone – without modification, software downloads or changes to the user’s calling plan with their cell phone provider.

“Rebtel is much easier to use than calling cards,” said González. “With Rebtel there’s no access number to dial, no PIN to remember. It’s a much better system.”

Pre-Paid Phone Cards Don’t Deliver

Calling cards rates often sound too good to be true – and usually are. Here are common complaints registered with the FTC:

- Cards don’t deliver the number of minutes they advertise

- Cards debit minutes or units even when the call is not connected to the number being dialed

- Hidden connection charges, taxes, and surcharges increase the rate-per-minute

- Bad connections

- Access numbers or PINs often don’t work

- Customer service numbers are often busy or simply don’t work

- Toll-free access numbers are constantly busy, preventing use of cards

- Issuers who go out of business and leave card-holders with a useless card

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