In 2013, Cardcall advertised the price of making a phone call to local and overseas destinations on its website and posters for its ‘Hot’ phonecard.
The advertised prices did not reflect various terms and conditions that applied to Cardcall’s phonecard services, including flagfall fees, service fees and other surcharges.
The terms and conditions, which were not prominently displayed, made it highly unlikely for consumers to pay the advertised price per minute through ordinary use of the relevant phonecard.
For example, the promotional poster for the ‘Hot’ phonecard advertised that the price of calling the United Kingdom was 2 cents per minute (landline) or 5 cents per minute (mobile). These prices did not reflect a flagfall fee of 29 cents for calls over two minutes and a condition that all calls were charged in five minute blocks.
The infringement notices were issued to Cardcall because the ACCC had reasonable grounds to believe that the advertisements contained false or misleading representations about the price of Cardcall’s phonecard services, in contravention of the Australian Consumer Law (ACL).
Cardcall is Australia’s market leader in prepaid calling cards, with a national distribution network of over 30,000 retailers.
“Consumer protection in the telecommunications sector remains a priority for the ACCC. If important terms and conditions such as additional fees or charges are not properly disclosed or are hidden in fine print, consumers can be misled into thinking goods or services are cheaper than they actually are,” ACCC Chairman Rod Sims said.
The ACCC may issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection provisions of the ACL. The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL.