Ofcom completes investigation of pre-paid calling cards

Ofcom today completed its investigation into the sale of pre-paid calling cards and secured written undertakings from three companies under Part 8 of the Enterprise Act 2002. These commitments are designed to prevent misleading advertising and unfair contract terms.

Pre-paid calling cards offer consumers an alternative way of making international calls to a variety of destinations and research suggests that they are particularly popular amongst consumers in lower income households or those who use English as a second language.

Ofcom started its investigation on 17 December 2003 and has examined how far the full range of possible call charges and detailed conditions of use are communicated to consumers.

Ofcom will seek to ensure that consumers have access to full details of all calling card charges when they decide to purchase a card. These details must include:

any connection and maintenance charges that may apply;
any additional charges relating to the type of telephone used to make the call;
the main terms and conditions applying to the use of calling cards.

Details of how to obtain all applicable terms and prices should also be included in all advertisements, using clear and unambiguous language.

Ofcom recommends that consumers considering the use of calling cards check that:

the information available on the cards is up-to-date;
they are aware of the complete charge structure and ask about any additional charges not listed in advertising;
the full tariff plan matches their expected usage habits.

Ofcom welcomes the co-operation that it has received during the investigation from Vectone Group Holdings, Calling Card Company (UK) Ltd, and Primus Telecommunications Ltd. The three companies have all agreed to sign undertakings which commit them to accurately advertising the prices and contract details for their calling cards and taking steps to improve the availability of their terms and conditions.

These measures will improve the quality of information available to consumers when considering purchasing calling cards provided by these companies. Ofcom believes that all companies selling pre-paid calling cards should meet these standards and will continue to monitor the situation across the whole of the calling card industry to ensure compliance with consumer protection legislation.

Ofcom’s investigation of pre-paid calling cards included the operations of a fourth company, Cheers International Ltd. Following a fresh complaint about the billing practices of this company, Ofcom has today opened a new investigation under both the Communications Act 2003 and Enterprise Act 2002. This investigation will look at the accuracy and reliability of Cheers International Ltd’s billing system and its publication of up-to-date tariff information.

Further details on the progress of this investigation will be published on the Competition Bulletin at www.ofcom.org.uk

Ends.

Ofcom completes investigation of pre-paid calling cards

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