The Federal Court today declared that international phone card seller Cardcall had engaged in misleading or deceptive conduct in breach of the Trade Practices Act 1974.
After action by the Australian Competition and Consumer Commission, Justice Lindgren made declarations, injunctions and orders by consent against Cardcall.
The ACCC alleged that Cardcall engaged in misleading or deceptive conduct in relation to its Talk Tomato, Daybreak, Ozcall and Its Green pre paid phonecards and vouchers by representing that:
- no fees other than the timed call charges would apply when in fact service fees, connection/disconnection fees and surcharges applied
- a certain number of minutes was available on the products when in fact the total number of minutes could, at best, only be achieved through one continuous call and calls were charged in incremental periods, service fees, connection/disconnection fees, and surcharges applied, thereby diminishing the number of minutes available, and
- certain rates per minute were available on the products when those rates did not take into account that calls were charged in incremental periods, service fees, connection/disconnection fees and surcharges applied resulting in a higher call charges.
Cardcall was ordered to place a corrective notice in various foreign language newspapers, including Chinese, Philippine, Arabic and Indian, and on its website.
Cardcall agreed to produce a generic consumer guide to fees and charges on pre paid phone products and to change its advertising to clearly and prominently disclose any additional fees and charges.
Cardcall co-operated with the ACCC to bring about a speedy resolution of the action. Cardcall consented to declarations, injunctions and other orders and contributed $20,000 to the ACCC's costs.
"This matter together with the ACCC's recent action against Tel.Pacific emphasises a fundamental flaw in the advertising of telecommunications companies that convey a headline message based on pricing, yet qualify it to an almost opposite effect," ACCC Chairman, Mr Graeme Samuel, said today.
"This action is part of the ACCC's ongoing commitment to stamp out these poor advertising practices and further puts the telecommunications industry on notice to change its practices.
"The ACCC will continue to take action against telecommunications companies who hide additional fees and charges in small print.
"Companies need to ensure that consumers buying their products are aware of any additional fees and charges that may be associated with the use of the product. These additional fees and charges must be clearly and prominently displayed to draw the consumers attention and not hidden in small print."
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