This research report takes a close look at pre-paid calling cards, a product which many consumers rely on - particularly people from non-English speaking backgrounds. Our research findings show that consumers looking to buy a pre-paid calling card are participating in what is essentially a lottery. With little useful information available about each card at the point-of-sale consumers run the very-real risk of purchasing a card that offers poor value for money.
Pre-paid calling cards allow consumers to purchase credit for phone calls, which can be accessed via the unique PIN printed on each card. These products are primarily used to make international calls and to date, have received very little attention from regulators and academics.
ACCAN commissioned ACA Research, a market research consultancy company, to conduct market research, product testing and desk research to determine if pre-paid calling cards work well for consumers.
Key findings include:
- Only 28% cards had any sort of in-store information about rates, terms and conditions. Only 17% of cards had easy-to-find information in stores.
- 94% of salespeople could not give the customer any information about calling rates, 100% of salespeople could not provide information about terms and conditions.
- 40% of cards had significant quality problems including failure to activate, poor call quality and instances where the number of minutes provided was significantly less than the number advertised.
- No cards’ actual rate per minute matched the advertised headline per-minute rate. The average actual rate per minute was 46.78 cents with an average of 22.04 cents difference between the advertised and the actual rate.
This research paints a picture of a market in need of intervention. The final section of this paper explores alternative regulatory options, drawing on international examples in the hope of starting a discussion about the best way to move forward.
Ultimately, the market should work well not just for consumers but for the calling card providers who are offering quality products. Currently it is difficult for consumers to identify the cards on the market which do offer great value along with simple and fair terms and conditions.
Download: Pre-paid calling cards: advertising, use and complaints processes in Australia [Adobe Acrobat PDF - 1018.85 KB]
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