The Australian Competition and Consumer Commission (ACCC) has accepted court enforceable undertakings from Pocket Money Limited (PML), a promoter and seller of phone cards for alleged misleading advertising.
PML has been advertising international call rates for its phone card service in the May – September edition of the "Sydney - The Official Guide" publication and on its Internet site. The ACCC is concerned that in both its print and Internet advertising PML failed to draw the readers attention to the application of a 10 cent per minute surcharge and 55 cent connection fee, which significantly altered the cost of the service.
It was further alleged that the offer of $5.00 worth of free calls in its print advertisement was conditional on a minimum amount of calls being purchased and this condition was not disclosed to consumers.
"The ACCC acted because it was concerned that this conduct contravenes sections 52, 53(e) and 53C of the Trade Practices Act 1974", ACCC Chairman, Professor Allan Fels, said today.
PML gave court enforceable undertakings to alter the format of its Internet site and to inform consumers responding to its print advertisement of the application of a 10 cent per minute surcharge and 55 cent connection fee.
PML further undertook that in future advertising not to include important terms in the fine print which significantly alter the value and/or character of the promoted product and will ensure that applicable terms and conditions are easily accessible to consumers.
"There is active competition amongst phone card service providers and the popularity amongst consumers of these pre-paid products appears to be growing strongly. However, as a relatively immature industry, phone card providers must be aware that if they adopt advertising practices that do not clearly state the conditions and charges attaching to their service, they run the real risk of contravening the Act", Professor Fels said.