Prepaid calling card company, Clifton Telecard Alliance, settles for $1.3 million

July 1, 8:06 AMUS Headlines ExaminerCharisse Van Horn

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CTA, leading distributor of prepaid calling cards settles for 1.3 million dollars

A leading distributor of prepaid calling cards, CTA or Clifton Telecard Alliance One, LLC as well as the company’s owner, Mustafa Qattous, has agreed to a settlement after being sued by the FTC. The lawsuit was filed in March 2008 and alleged that Clifton Telecard Alliance One had been distributing prepaid calling cards that did not contain the amount of minutes advertised in the company’s marketing campaigns. The Federal Trade Commission conducted their own testing on the calling cards and determined that they delivered less than half of the advertised minutes.

In addition to providing a fraudulent amount of minutes, the FTC also charged the company with failing to disclose that consumers’ would pay, whether or not the callers were connected to their intended recipients, as well as with executing hidden charges.

CTA distributes the calling cards under a variety of names, including “CTA Mexico” and “African Dream.” Other names the cards are distributed under include “CTA Africa”, “CTA World”, “First Choice”, and “Hello Africa.” Their many target audience are illegal aliens and immigrants who use the prepaid cards as their sole source of communication. The prepaid calling cards were sold through outlets including large chain retail stores and gas stations.

In March 2008, the FTC requested a U.S district court judge to halt the company’s prepaid calling card scams. CTA is a major distributor of calling cards and sells approximately 4 billion dollars worth of prepaid calling cards per year. The FTC filed their complaint in New Jersey and the stipulation agreement does not include any possible future lawsuits in other states.

The 1.3 million dollar settlement will be paid to the Federal Trade Commission within five days after the final order was issued by wire transfer. The 1,300,000 will be placed in an account that is administered by the Federal Trade Commission or its appointed agent and will be used for equitable relief. The relief includes but is not limited to consumer redress. Funds not used for consumer redress or available funds left after consumer redress may be used for consumer information remedies and other equitable relief. Any remaining funds will then be deposited in the United States Treasury.

The FTC is cracking down on fraudulent prepaid calling card practices. If you have questions or concerns regarding the practices of a company that you believe are unfair or fraudulent, you are encouraged to file a complaint with the FTC. You may file a complaint online at: Complaint Assistant  or you may contact the FTC’s complaint line by phone at 1-877-382-4357