The number of minutes the card tells you that you have, you get half of that," says Alma Hernandez, 22, a native Mexican who works at a taco stand in the Plaza Fiesta, an Atlanta mall popular with Latinos. "It's what everybody thinks."

Now fresh allegations of fraudulent marketing of phone cards are coming from an unlikely source: some of the biggest companies selling the cards. Confirming suspicions long held among users, these corporations are accusing each other in federal court litigation in Newark, N.J., of systematically shortchanging vulnerable customers.

Prepaid phone cards have proliferated in recent years to become a $4 billion industry whose customers are mostly poor immigrants, older people, and other low-income consumers unable to afford conventional phone service or lacking the documentation needed to sign up. Major retailers such as Wal-Mart Stores Inc. (WMT ) and Walgreens (WAG ) sell prepaid cards under their own brands, but these are generally thought to provide the service they advertise and aren't involved in the current controversy.