Samuel's battle with the phone cards

Summary:Telephone call cards — how dodgy are they, despite recent court actions by the Australian Competition and Consumer Commission?

The Australian Competition and Consumer Commission (ACCC) is taking Boost and PPS, an Optus subsidiary, to court over contraventions of the Trade Practices Act in relation to their prepaid phone cards.

This isn't an isolated incident. In March, the Federal Court found that Tel.Pacific had misrepresented the benefits of its prepaid phone cards. In May, Cardcall, owned by gotalk, was also found to have engaged in misleading or deceptive conduct. It all seems to get down to those extra charges that consumers are unaware of when they buy these cards. They see a great headline rate and are sucked in.

In today's program we ask whether, despite the court findings against Cardcall, the Talk Tomato card is still an example of misleading promotion. It seems possible to go in and buy the card unaware of the complex terms and conditions which include:

  • All call charges rounded up to the next 5 cents
  • All calls incur 80c surcharge after four minutes. All calls incur a 80c or $1.80 surcharge after one minute
  • Calls are charged in blocks of one minute, followed by subsequent 10-minute periods
  • 50c service fee applies every two days following first use

(Sourced from Cardcall.com.au (PDF))

You'd have to admit, the Talk Tomato card sounds a bit shonky. Suraj Tschand from PEC, who provides software for calling card operators, has seen it all. He says it's a con too! Yet growing the calling card business is clearly important to gotalk, who claims to carry 20 per cent of all outbound calls from Australia.

So how do you keep this sector of the telecommunications industry under control? On this week's Twisted Wire I talk to ACCC chairman Graeme Samuel, Phone Choice spokesperson Doug Purdie and Suraj Tschand, president of Parwan Electronics Corporation (PEC)

Incidentally, gotalk recently announced a partnership with Tata Communications that will see the Indian-based telco manage gotalk's international gateway. A press release stated that, as part of the deal, "Tata Communications will also co-brand prepaid calling cards using gotalk's existing card products and distribution channels". I hope the company checked the fine print.

What do you think? Do people expect all these extra charges? Do you have an example of a confusing phonecard? Leave the details in the Talkback section at the end of this post.

Topics: Government : AU, Government

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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