Ofcom completes investigation
of pre-paid calling cards
11 October 2004
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
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