Connection fees, maintenance fees, network charges, administrative fees, service fees and excessive minute rounding. These are just some of the hidden charges for pre-paid international phone cards, according to research by Julia Marlowe, a professor in the Department of Housing and Consumer Economics.

“There is so much variation in cards and fees that you can’t just go to a store, look through the selection and make an informed choice,” Marlowe says. “Consumers rely on their own experiences and those of others to determine which cards to buy.”

Working with a team of 20 undergraduate and graduate students, Marlowe found that the cost-per-minute rates may be up to 87 percent higher than expected on the phone cards. An expected call rate of 15 cents per minute, for example, may end up costing 28 cents.

Expected costs are computed by dividing the cost of the card by the number of minutes consumers are told they have when a call is placed, Marlowe explains. Actual cost is determined by dividing the cost of the card with the number of minutes consumers actually receive.

Marlowe’s team purchased 250 pre-paid phone cards—at $5 to $10 per card—from a variety of outlets, including major retailers and family-owned stores. They placed calls to several Spanish-speaking countries, calling the same country at least twice on the same card to determine how many minutes were lost to various fees and rounding of minutes.

Companies generally round minutes at one- or three-minute intervals, Marlowe says. “If it’s a three-minute interval, you’re charged for six minutes even if you talked for only 31/2 minutes. In one case, minutes were rounded at eight-minute intervals, and that doesn’t include any additional fees that were deducted.”

While the cost of using the cards was usually far higher than expected there were a few exceptions. One card with an expected cost of 8 cents per minute actually cost only 2 cents per minute.

“This industry has grown from about $1 billion in sales in 1996 to $4 billion in 2004,” Marlowe says “The number of cards targeting the Latino community has exploded, but we found that in many cases the information provided is either incomplete or misleading, or both.”

Prior to making calls, researchers, all of them fluent in Spanish, carefully read the information printed on the cards and called the customer service number to gather more information on fees.

In some cases, information on the front of the card contradicted information on the back, Marlowe says. “For example, the front of one card said, ‘Sin cargo de conexion’—without connection charge. But the back said, ‘cargos de conexion aplicaran’—connection charges apply. Some cards stated there was no connection fee, but the fine print stated that there is a post-call or disconnect fee. This is clearly misleading,” she points out.

And calling the customer service number was often unhelpful. In a third of the cases, callers couldn’t reach a customer service representative; in many cases representatives were unable to answer basic questions about fees or minute rounding. There’s also the issue of cards changing frequently.

“A card that worked well one time may not be available the next time you look for it,” Marlowe says.

The students who participated in the study also had the opportunity to share their results in a variety of outlets.

“Although most of the students who helped with the study were native Spanish speakers, the few who were not were fluent in Spanish,” she says. “Many of them presented the findings in a variety of outlets. Some worked with local radio stations to share the information and one student published her findings in a local bilingual newspaper. We also had students present at the American Association for Family and Consumer Sciences.”

Since completing the study, Marlowe has published her results and given several presentations. She’s also begun a follow-up study to determine whether advertised claims regarding prepaid phone cards are true. Once again she’ll have the help of undergraduate and graduate students.

“It’s been a great benefit to me as a researcher to have the help of these students,” Marlowe says. “For one thing, my Spanish isn’t very good. But for another, we’re able to gather so much more information by having their help. It’s been fun working with the students and they seem to enjoy the experience. It also has given me the opportunity to discuss consumer economics and research methods with them.”