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1. How do pre-paid calling cards work and how are they most commonly used?

Pre-paid calling cards offer consumers an alternative way of making national and international calls to a variety of destinations. Calling cards are often purchased by consumers from local retailers, including newsagents, grocers, or over the Internet.

Calls are then made from any fixed line or mobile phone by the consumer dialling an access number (020 7, 0800, 0845, 0870 and 0871 access numbers are commonly used) and then by typing in the unique PIN number on the back of the calling card.

Calling cards are generally sold in denominations of £5, £10 and £20, although discounts can often be obtained for the purchase of multiple numbers of cards.

2. What is Ofcom's view on the standard of consumer information in the calling card industry?

Ofcom is concerned that a number of calling card companies may be failing to provide adequate information to consumers regarding the charges, terms and conditions that apply to the use of their calling cards.

Calling card companies should include details of all their main terms and conditions on their advertising material and that they should detail where full details of the terms and conditions can be obtained.

Where calling card companies run a website, they should include full details of all the applicable charges, terms and conditions on this website. Where no website is available then this information should be available in every major office of the calling card company and should be made available to every consumer that reasonably requests details of the applicable charges, terms and conditions.

3. What is Ofcom intending to do about the standard of consumer information provided by calling card companies?

Ofcom will continue to monitor the calling card industry and will open investigations where significant concerns or specific complaints arise. Ofcom will also continue to provide guidance and advice to calling card companies regarding their individual terms and conditions where requested to do so and would encourage the companies to approach Ofcom if they are unsure as to the compliance of their terms and conditions.

4. Are there other areas that Ofcom is seeking to address in relation to calling cards?

Ofcom is also seeking to ensure that calling card companies are providing the service that they are promising, particularly in relation to:

• whether the number of minutes claimed as available can actually be obtained;
• whether the charges levied are actually those quoted; and
• whether the cards are expired before the credit runs out.

5. What are Ofcom's powers in this area?

Ofcom has the power to carry out investigations against calling card companies under both the Communications Act 2003 and the Enterprise Act 2002.

Under section 45 of the Communications Act, Ofcom has issued a number of general conditions that apply to all providers of electronic communications services, including calling card companies.

General Condition 10 requires that clear and up to date details of all applicable charges, terms and conditions be published on a communications provider’s website and General Condition 11 requires that a company levy accurate bills for its services. Failure to comply with the general conditions can lead to enforcement action under sections 94-104 of the Communications Act, including ultimately the imposition of fines.

Part 8 of the Enterprise Act 2002 gives Ofcom the power to enforce certain consumer protection legislation, including the Control of Misleading Advertisements Regulations 1988 and the Unfair Terms in Consumer Contracts Regulations 1999.

These regulations respectively prohibit advertising that is likely to mislead or deceive consumers and contract terms that are unfair. Where Ofcom considers that a calling card company’s advertising or contract contravenes these regulations, it can seek undertakings from the company in question to remedy its behaviour. Failure to provide undertakings can lead Ofcom to seeking an enforcement order from the Courts.

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