What can you tell me about Prepaid Phone Cards?

The CPUC has regulated Prepaid Phone Cards since January 1, 1999. California legislature approved CPUC statutes that included language regulating the use of Prepaid Phone Cards. Public Utilities Code Section 885 states “Any entity offering the services of telephone prepaid debit cards is subject to the registration requirements of Section 1013, commencing January 1, 1999, unless that entity is certificated by the commission to provide telephone service.” Resellers of prepaid telephone debit cards who are NOT subject to the registration requirement include:

Ø Merchants who only provide a marketing venue for telephone prepaid debit cards;

Ø Entities that only print information on telephone prepaid debit cards.

Prepaid phone cards, also known as debit cards, are used to make long distance telephone calls. Phone cards are prepaid by the purchaser, usually in cash and offer the consumer the convenience of making long distance calls, domestically or internationally, without using cash or telephone credit cards. Calls are made by accessing a 1-800 number on the carrier’s connecting switch and are activated by using a Personal Identification Number (PIN) printed on the back of the phone card. Customers normally purchase phone cards for specific dollar amounts. The cards provide long distance minutes based upon the specific rates set by the carrier. As calls are made, the usable minutes are automatically deducted from the card balance, which is either recorded on the card itself or on a central computer through which the long distance calls are routed. Some cards are also re-chargeable, allowing the user to add more calling time by dialing a toll-free number or accessing a web site and using a major credit card.

Phone cards can be purchased at many locations, primarily convenience stores, liquor stores, discount stores, supermarkets, department stores, and small markets and shops. They can also be purchased through the Internet.

The price of Phone Cards depends upon the rates and charges, some of which are required by law to be posted at the point of sale or listed on the phone card. If you don’t see it posted, ask the merchant who is selling you the phone card. Be aware that prepaid phone cards often have additional charges that reduce your total long distance minutes such as connection fees, monthly or weekly maintenance fees, access taxes, and other fees charged by the carrier. These must be disclosed to you at the point of sale.