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CALIFORNIA / News and Insight on Business in the Golden
State | THE STATE / TECHNOLOGY

Phone Card Suit Goes Ahead, Sans Refunds

April 21, 1998|Associated Press

A consumer suit challenging phone companies' failure to disclose that prepaid calling cards round charges up can proceed, but it can't seek refunds, the 1st District Court of Appeal in San Francisco ruled. The court reinstated part of a suit against AT&T Corp., Sprint and the parent companies of three retail chains that sell phone cards: Target, 7-Eleven and Longs Drugs. The suit contends card buyers are misled because the packages do not reveal that any fraction of a minute at the end of a call is charged as a full minute. A San Francisco County Superior Court judge had dismissed the suit, saying the practice was part of rates approved by regulators. But the appeals court said a limited false-advertising claim could proceed. The suit does not challenge the rates, only their advertising. Justice Herbert Walker said in the 3-0 ruling that phone companies and retailers promoting phone card rates "must do so with sufficient accuracy that they do not risk misleading or deceiving the consumer."

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