Phone cards' hidden charges way out of line

Phoney fees and charges lurk in the small print

A CHOICE report into international pre-paid phone cards has found consumers need
to be aware of a range of extra and undisclosed fees and surcharges.

Some phone cards claim to have no connection fees but instead impose service or
‘disconnection’ fees. For example, one $10 card has an 80 cent surcharge after four
minutes and a 50 cent service fee every two days - even if you don’t make any calls.

Lime Telecom's "Ezy2Call" appears to offer an inexpensive way to phone mobiles in
the UK, with a rate of 25c a minute. But the card’s terms - which you have to go on
their website to see - include a disconnection fee of 15 cents for every call lasting
more than five minutes.

The same card also included a disclosure that each call is "billed with an additional
300 seconds on top of actual duration”, without offering any explanation as to why.

“It’s as if some of these companies have a competition going to see who can come
up with the most unwarranted charges possible and then give them strange names
so they can advertise they have no connection fees, " said CHOICE spokesman
Christopher Zinn.

The Australian Competition and Consumer Commission recently took three phone
card companies to court for misleading customers. They found Tel.Pacific's claims
about the advertised minutes available on just one card could only be realised by
one continuous call of over 33 hours.

CHOICE says before buying phone cards consumers should ask vendors for brochures
to obtain details about hidden fees and charges. Also, the advice is to shop around.
CHOICE found cards with a $10 face value could be bought for $8.50.

New industry guidelines for these calling cards prepared by the industry now say the
terms and conditions must be more transparent and detailed on posters and
brochures. However, that doesn’t mean you pay less of them.

CHOICE says what could have been a victory for transparency was somewhat
tempered by the fact that fees and charges aren’t printed on the actual card.

"The problem is the sheer number of terms and conditions attached such a
seemingly simple product like a phone card. It makes it very confusing for many
consumers,” said Zinn.

Want to know more?

See the CHOICE report

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Hidden fees in phone cards

CHOICE uncovers the hidden traps with international prepaid phone cards and what their blaring posters don’t tell you.

25 Sep 2009 | Extra costs, such as “service” fees that gobble up credit even when you’re not making calls are often not advertised on the posters or phone cards.


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