As a result of the investigation Ofcom has obtained written undertakings from three companies 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 launched the investigation into the sale of these cards in December last year, following complaints of possible discrepancies between advertised charges and actual charges levied by companies selling pre-paid calling cards.
Using consumer protection and competition powers granted to it under the Enterprise Act of 2002, the regulator found that most of the discrepancies were caused by a lack of clarity in the adverts for the cards and the terms and conditions relating to their use.
Ofcom is therefore seeking 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; and
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, said Ofcom.
The regulator 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; and
the full tariff plan matches their expected usage habits.
According to Ofcom, three companies that sell pre-paid calling cards – Vectone Group Holdings, Calling Card Company (UK) Ltd, and Primus Telecommunications Ltd – 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, says Ofcom, 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 also included the operations of a fourth company, Cheers International Ltd, but following a fresh complaint about the billing practices of this company, the regulator announced yesterday that it had opened a new investigation into the company's billing system and its publication of up-to-date tariff information.