When a minute's not a minute
Depending on the prepaid phone card you buy, and new rates, it could equal five.
By IVAN PENN, The Consumer's Edge
Published May 19, 2007
Watch the fine print
A caller can be charged several minutes for every real-time minute. The reason? The FCC decided in June that phone cards should be treated like any other telecommunication service and subject to the same fees.
Although the face value of the AT&T prepaid phone card says 75 minutes, read the fine print.
On the front of the card in small print, it notes that "state-to-state calling... in-state rates may be higher."
On the back, AT&T clarifies in fine print that calls beginning and ending in the same state are deducted at the rate of 5 minutes for every actual minute used in Florida and some other states.
Some states' rates are even higher -- a relatively new rate increase. The new rates are on cards that arrived on retailers' shelves over the last few months.
Helen Gysendorfer of Holiday recently discovered how costly the new rate charges can be when she bought a 900-minute AT&T card for $25 to call her sister in Miami. She never saw the small wording that noted the value of the card would be less for in-state long distance calls one-fifth of the face value, or 180 minutes.
"I made a telephone call to my sister... It said you now have 180 (minutes), " she said. "I didn't speak to her at all. She was not at home."
AT&T attributes the fee hike to a Federal Communications Commission decision last June. The FCC determined prepaid cards should be treated just as any other telecom service and be subject to the same fees. One of the most notable costs is an access fee. For in-state long distance calls in Florida, long distance providers are charged access rates that are passed onto consumers.
Amanda Ray, an AT&T spokeswoman, said the company took three steps to inform consumers about the change in prepaid cards, which included announcements on its Web site; a note on the back of the cards; and a message delivered when prepaid phone service users who call to add minutes to their cards.
Ray advises customers to "do the research."
The change, as Gysendorfer learned, can mean that calling long distance in-state using a prepaid phone card can cost a bundle. The 75 minute AT&T card at Wal-Mart costs $5.62 with tax or 7 cents a minute. You get just 15 minutes for in-state calls.
That's 37 cents a minute for a call from Tampa to Miami.
By comparison, calling plans for land and wireless services charge about 10 cents a minute.
AT&T has recognized the disparity between in-state and out- of-state access rates and has been pushing a rate reform package, called the Missoula Plan, which the telecom says will lower consumer costs by helping to make all access rates more consistent.
The FCC still is reviewing the Missoula Plan. In the meantime, before you buy a prepaid phone card, here's the edge:
- Check the fine print. The importance of reading the details can't be stressed enough.
- Shop for long-distance deals. The Consumer Federation of America says using prepaid cards for calls from home or for local calls can cost more than regular telephone service.
- Know the company selling the card. The CFA notes that some companies sold prepaid calling cards and went out of business before customers used them.
The Consumer's Edge is a twice-monthly column to help consumers in the marketplace. Ivan Penn can be reached at email@example.com or (727) 892-2332.