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