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NCL ED testifies before Congress on 'wild west' prepaid calling card industry

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Testimony of Sally Greenberg, Executive Director of the National Consumers League before the United States House of Representatives Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce Hearing on Calling Card Consumer Protection Act (H.R. 3993)

 

December 3, 2009

Read the full testimony (.pdf)

Good morning, Mr. Chairman. My name is Sally Greenberg and I am Executive Director of the National Consumers League. I appreciate this opportunity to appear before the House Committee on Energy and Commerce to again discuss the need for greater consumer protections in the purchase and use of prepaid calling cards. When we last appeared before this committee to discuss the issue, we equated the prepaid calling card marketplace with the “Wild West,” where unwary consumers too often fall victim to unscrupulous sellers and merchants. A little over one year later, we are sad to say that the situation for consumer remains more “Gunsmoke” than “Little House on the Prairie.”

The National Consumers League, whose founding in 1899 makes us the oldest consumer organization in the United States, has a longstanding interest in protecting consumers from fraudulent practices and is the only consumer group that operates a national fraud center. (NCL’s Fraud Center is described at www.fraud.org).

I want to applaud members of this Committee for the scrutiny and attention you have given to the issue of prepaid calling cards and commend Congressman Engel for introducing H.R. 3993 the “Calling Card Consumer Protection Act.” Consumers rely on members of this committee to defend consumer rights and protections and to look out for consumer interests. In my testimony, I will address some of the facts and figures describing the magnitude of the prepaid calling card industry and the large amounts of money involved. I will also discuss the fraud and deceptive practices associated with that industry and actions taken at the state and federal levels in response to fraud. I’ll discuss why NCL supports H.R. 3993, and I’ll make some policy  recommendations.