Samuel's battle with the phone cards

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?

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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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Talkback

4 comments
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  • Things have changed

    I haven't had a reason to use phone cards for the last few years - but they were great when my kids were travelling around Europe. We used GoTalk cards and found the service spotty, but the pricing structure at the time open, clear and cheap. But looking recently, the conditions and complex billing schemes used by these cards seems to have gone to extremes. Good on the ACCC for trying to get some sanity into this market.
    anonymous
  • Phone Cards

    Like the other person, i have not used a phone card for years, but even with a mobile phone on the minimum plan with our old mate "Telstra", just having an emergency mobile, at $ 20.00 per month, as a pensioner, it stillworks out expensive, for just having it sitting there
    anonymous
  • calling cards

    I've reported 2 companies already. What they do is 'mistime' how long you were talking for. For example a 55 min call might be a 75 min (or more) call to them and they charge accordingly. I call the U.S every day, so it all adds up. I've got some credit back in the past year, but I've ad to fight for every cent. Even got a free '15 minute' call to test one company. They rang me back to sell the card. I told them that I was lucky if my call lasted 5 minutes, so I my answer was 'no' because I didn't get what they were meant to give me. I'd also advise anyone wanting to purchase a calling card to read all the terms & conditions. Need to watch out for hidden charges.
    anonymous
  • Talk tomato, go talk

    I used talk tomato for the last two years for both international and local calls, for the first year the call rates and use times were what they advertised. The following year I began to notice the amount of credit left was diminishing a lot quicker, my partner rang them numerous times asking questions re charges etc they were deceptive to the questions, often trying to confuse, she was referred to their website which was just as deceptive. Go talk use stealth and deception and steal from their customers, for a company i once recommended, - - no more !!!!
    anonymous