Office of the Attorney General News Release Archive

Thursday, August 5, 1999


Alleges deceptive phone card advertising

AUSTIN - Texas Attorney General John Cornyn today announced the filing of a lawsuit against Sam's Club, a subsidiary of WalMart. The lawsuit alleges that Sam's Club falsely and deceptively advertised the value of Sam's Club prepaid calling cards.

"Sam's Club advertised that their calling cards provided 120 minutes of calling time. In fact, under some circumstances, their cards provided only 40 minutes once you take their fees into account. They are deceptively hiding their exorbitant surcharges behind cheap per minute rates," said Attorney General Cornyn.

The Attorney General alleges several violations of the Deceptive Trade Practices Act (DTPA). Sam's Club advertised that their prepaid phone cards provided 120 minutes of calling time. Actually, the card provided substantially less time when used from a payphone due to applicable surcharges. They also falsely advertised a rate of fifteen cents per minute when the actual cost per minute was significantly higher. Furthermore, they fail to disclose that using the card at a payphone may incur a two minute charge to the calling card thus reducing the card's available minutes and increasing the per minutes cost.

The Attorney General's office has asked the court to enjoin Sam's Club from misrepresenting the number of minutes available, misrepresenting the cost per minute of the prepaid calling card, misrepresenting the calling card savings over other long distance services, and failing to disclose surcharges.

The Attorney General's office also asks that the Court award the State $2000 per violation of the Deceptive Trade Practices Act (DTPA), pay the State's attorneys' fees, and pay restitution to each consumer injured by Sam's Club. This case is being handled by Assistant Attorney General Art Weiss of the Austin office of the Consumer Protection Division. The lawsuit was filed today in District Court in Travis County.

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Contact Ted Delisi, Heather Browne, or Tom Kelley at (512) 463-2050