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Public alerted to misleading phone card deals

Commission alerts public to misleading phone card deals

The Commerce Commission is warning members of the public to be wary of a number of phone card deals currently on the market.

Director of Fair Trading Deborah Battell said the Commission was concerned about misleading advertising by a number of small phone card operators.

“The Commission is aware that there may be up to 50 different phone cards on the market, however the recurrent issues seem to largely relate to those deals advertised by some of the smaller operators.”

Ms Battell said that the issues the Commission’s inquiries have uncovered include: failure to clearly advertise prices as GST-exclusive; failure to disclose that prices are obtainable only to a limited number of main centres in the advertised countries (other centres attract much higher prices than those advertised); failure to disclose that cards must be fully used within a particular time period; additional per minute fees for calls made using the 0800 ‘toll-free’ numbers necessary to connect to the phone card supplier’s network; additional per minute fees for calling from or to a mobile phone; additional minutes used in connecting to various networks and relays; and phone card companies not being contactable on the advertised help lines.

“The overall effect of these issues is that in some cases calls are costing more than represented. “In one recent example, a deal offering national calls for six cents per minute, could actually have cost the caller 24 cents per minute, when additional charges for using an 0800 ‘toll-free’ number and GST were added,” Ms Battell said.

“Because some companies are failing to provide consumers with accurate information, many people think they are getting a much better deal than they actually end up with.

“People should check the cards very carefully before buying them and ensure they read all the fine print,” she said

“Even then, the Commission is concerned that consumers may not avoid all potential problems. This is because of the numerous undisclosed conditions associated with some of the cards and the lack of customer assistance provided by a number of the phone companies.”

The Commission is continuing its enquiries into the issue.

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