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Dollar Phone and Locus Settle Lawsuit Brought by IDT and UTA

Agree to Work for Changes in the Prepaid Phone Card Industry

NEWARK, NJ, BROOKLYN, NY and ENGLEWOOD CLIFFS, NJ (March 28, 2007) Dollar Phone Corp. and related companies, as well as Locus Telecommunications, Inc., have both agreed to settle the lawsuit brought by IDT Telecom, Inc. and Union Telecard Alliance, LLC against Dollar Phone, Locus, and other prepaid calling card companies. IDT/UTA, Dollar Phone and Locus have agreed to work together to improve practices in the prepaid phone card industry. This brings to three the number of defendants who have settled the litigation commenced by IDT/UTA earlier this month. Terms of the settlement were so-Ordered yesterday by the Honorable Dennis M. Cavanaugh, United States District Court Judge for the District of New Jersey.

On March 8, 2007, IDT/UTA commenced a lawsuit against several prepaid calling card companies, including Dollar Phone and Locus, alleging false advertising and deceptive trade practices. Dollar Phone and Locus deny all of the allegations in IDT/UTA's complaint.

In connection with the settlement, Dollar Phone and Locus have agreed to deliver 100% of the minutes promised to consumers. IDT/UTA believes that until all defendants have agreed to adhere to this standard, it is beneficial for the continued prosecution of this action to have a streamlined litigation with fewer defendants.

IDT/UTA, Dollar Phone and Locus also agreed to promote industry best practices and standards that protect consumers of prepaid card services and that establish a level playing field for all companies that sell, and provide telecommunications services for, prepaid cards. IDT/UTA, Dollar Phone and Locus agreed to develop standards for disclosures, disclaimers and definitions for prepaid phone cards; mechanisms for testing the accuracy of disclosures and disclaimers made in connection with prepaid phone cards; and mechanisms for testing the ability of prepaid phone cards to deliver the number of minutes promised for particular destinations. The parties also agreed to undertake efforts to promote such standards among all prepaid card business and to promote independent monitoring of compliance with such standards.

IDT/UTA's lawsuit against the remaining defendants is still continuing in federal court in Newark, New Jersey.

Source: IDT Telecom, Inc. (idt.net)


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