Calling Card Vendor Clifton Telecard Alliance Settles for $1.3M

Today, the Federal Trade Commission (FTC) announced a $1.3M settlement with Clifton Telecard Alliance One (CTA) for calling card fraud. Also named in the settlement was Mustafa Qattous, the owner of CTA. The settlement resolves a lawsuit filed by the FTC against Clifton in April, 2008.

The FTC charged that CTA "misrepresented the number of calling minutes consumers would get with its calling cards, charged hidden fees, and failed to disclose that consumers’ cards will be charged whether or not the calls are connected".

As part of the settlement, Clifton is ordered not to misrepresent the number of minutes of talk time a customer can expect to receive. As well, CTA is required to fully and "conspicuously disclose any material limitations" on the use of their cards, including all applicable fees.

CTA, a New Jersey-based company, is a major distributor of prepaid calling cards in the United States. It does business under many brands names - often, but not always, using including the name 'CTA'. Some cards being promoted on their website as of today include CTA Mexico, Hello Africa, CTA Africa, and Sunny Sky.

CTA calling cards are sold mostly in convenience stores, gas stations, and other retail outlets. Cards are sold in denominations ranging from $2 to $20. CTA cards are primarily intended for outbound international long distance calling from the US. They also sell domestic long distance cards for the US.

This action by the FTC is part of a larger and sustained crackdown on deceptive marketing and fraud by calling card companies. In February, 2009, this effort previously led to $2.25M in settlements with several other calling vendors.

The FTC was assisted in its efforts against CTA by several organizations, including the "Offices of the Attorneys General for New Jersey, Michigan, and Washington, as well as El Salvador's Defensoría del Consumidor, the Egypt Consumer Protection Authority, and Mexico's Procuraduría Federal del Consumidor (PROFECO)".

As a result of a prior lawsuit in the State of Florida, CTA was previously banned from doing business in Florida for similar reasons.

Additional information:

Clifton Telecard Alliance website

FTC Clifton Telecard settlement announcement

Additional Clifton Telecard Alliance case information

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