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Press Release July 12, 2000 |
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AUSTIN, TX - Consumers Union today applauded a rule
adopted by the Public Utility Commission that will make it easier for
Texas consumers to understand the prices and terms associated with
prepaid calling cards.
The rule, which implements the provisions of SB 1020 (Sen.
Shapleigh and Rep. S. Turner) passed by the Legislature in 1999, will
provide consumers the necessary information to help them determine
the per-minute rate, the minimum rate and call fees associated with
these cards.
Prepaid calling cards are a fast growing market that is
particularly popular with low income people, individuals on fixed or
limited income such as college students and seniors, and those with
bad credit. The cards are sold in dollar amounts such as $5, $10 and
$20. But every $10 card, for example, is not the same in its
purchasing power. Each card can charge a different per-minute rate,
minimum rates, or per-call fee. That means one $10 card could pay
for a whole lot more calls than another $10 card, depending on these
rates and fees.
"That's the problem and the reason why this rule is so necessary,"
said Janee Briesemeister, a senior policy analyst for CU's Southwest
Regional Office. "There is often no way for consumers to determine
what they are buying. This rule will make it easier for consumers to
shop for the best deal."
The PUC will begin another rulemaking on financial requirements
for prepaid calling card companies. The rulemaking was prompted by
the case of Twister Communications Inc. of Conroe, Texas, which went
out of business and left millions of dollars of worthless cards in
the hands of consumers and retailers.
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
