40 per cent of calling cards are ripoffs: ACCAN

Hidden fees and false advertising are continuing problems of prepaid cards.

Nearly half of prepaid calling cards have hidden fees, mid-advertise the number of minutes or work poorly or not at all, according to the Australian Communications Consumer Action Network (ACCAN).

ACCAN conducted a mystery shopping test of 100 cards used for international calls and said it found major problems with 40 per cent of them. However, it’s difficult to tell which ones are good without testing them, it said.

“There’s no real way at present to know if the phone card you’re buying is good value or not, or, in some cases, if it will even work,” said ACCAN spokeswoman Elise Davidson.

“There are a huge amount of these products to choose from and next-to-no information available in store about rates, fees and charges.”

ACCAN said the “best and fairest” cards it tested were:

  • The Genuine Aussie Phonecard
  • China Gold
  • Hong Bao

The consumer group said to avoid:

  • Call Mama
  • Talk Tomato
  • Hot

“The best pre-paid calling cards we found have no hidden fees, one-minute call charging and offer up to 500 minutes of value,” Davidson said. “The worst examples charge for calls in 15-minute blocks and have complex, hidden fees and charges, including in one case, a random $2 surcharge after four minutes of call time.”

ACCAN said 48 per cent of the calling cards applied a daily service charge once activated, and 23 per cent provided fewer minutes than advertised. In addition, 7 per cent of the cards couldn't be activated and 9 per cent had poor call quality.

“Our research shows that there are definitely issues with the way these products are advertised,” said Davidson. “We aim to cut through some of the confusion for consumers by revealing the best and the worst cards out there, and publishing advice for consumers about how to avoid getting ripped off.”

The Australian Competition and Consumer Commission (ACCC) took action in 2009 against calling card providers tel.pacific, Cardcall and Boost. The Federal Court found that the providers engaged in false, misleading or deceptive behaviour.

ACCAN said it would be informing the ACCC about what may be repeat offenders. The group is not yet calling for regulation, Davidson told Computerworld Australia.

An industry guideline exists for prepaid calling cards, however it's not registered by the Australian Communications and Media Authority (ACMA) and therefore isn't enforceable, Davidson said.

"We're talking with the ACCC on advertising under the Australian Consumer Law," she said. "It made a number of rulings a few years ago and we think some of the dodgy cards [we've] picked up may be from the same companies."

Follow Adam Bender on Twitter: @WatchAdam

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Tags prepaidripoffAustralian Competition and Consumer Commission (ACCC)calling cardsfalse advertisingAustralian Communications Consumer Action Network (ACCAN)internationalAustralian Communications and Media Authority (ACMA)

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