Attorney General Settles Case with Prepaid Calling Card Seller
Telmex USA Accused of Failing to Deliver Promised Calling Minutes

BALTIMORE, MD ( August 11, 2010) -Attorney General Douglas Gansler announced today that that his Consumer Protection Division has entered into a settlement with Telmex USA, LLC (Telmex). Telmex is a subsidiary of Telefonos de Mexico, S.A.B. de C.V., the primary telecommunications carrier for Mexico. Telmex sells telephone calling cards for users to make international calls to more than 100 different cities outside of the United States, including major cities in Latin and South America, Africa, Europe and Asia.

Telmex sells its prepaid calling cards to a network of distributors that sell the calling cards to convenience stores, grocery markets and check cashing stores. In Maryland, Telmex sold its cards, through its distributors and their retailers, largely to Latino consumers residing in Prince George’s and Montgomery counties who have relatives living outside the United States.

Telmex’s posters and point-of-sale advertisements promised that the cards would deliver a large number of calling minutes to specified countries. For example, one poster promised that its $5.00 “Sonrisa” brand prepaid calling card would deliver 1250 calling minutes to Mexico City, Guadalajara or Monterrey. The Attorney General alleges that the Sonrisa card and many other cards sold by Telmex actually delivered substantially fewer minutes than promised in Telmex’s advertisements. Telmex sold its prepaid calling cards under a number of different brand names including “TXT2 Communications,” “Tier One,” “Oro Honduras,” “Lunatico,” “La Nativa,” La Deportiva,” “La Pantera,” “Sonrisa,” “La Botantita DMV,” “Che Cala” and “El Aventurero.” Telmex denied that it had violated the Consumer Protection Act.

“Consumers have a right to receive what they are promised,” said Attorney General Gansler. “Through today’s settlement, Telmex USA and all of its distributors must reform their practices and deliver the calling minutes that they promise to consumers.”

Under the terms of the settlement, Telmex has agreed not to sell any prepaid calling cards to Maryland consumers unless the purchaser can obtain all of the number of minutes that are advertised when he or she uses the card for phone services. The settlement also contains injunctive relief concerning how Telmex must offer its cards to consumers, including a requirement that it more clearly disclose any fees that will be applied to its cards when they are used. Telmex also agreed that it will require its distributors to comply with the terms of the settlement.

Telmex agreed to pay $60,000 in restitution, which the Attorney General will use to fund a state agency or charitable program to benefit persons who may have been affected by the actions which led to the Attorney General’s settlement with Telmex. Telmex has also agreed to pay a $90,000 civil penalty and $45,000 for costs.