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Lime Telecom, a pre-paid calling card operator, has been directed to comply with the industry's code having ignored a prior warning from the regulator. The ACMA has found the service provider consistently failed to provide consumers with basic information on prices, expiry dates and fees.

The ACMA's investigation into pre-paid calling card operators and their subsequent direction for Lime Telecom to comply with the Telecommunications Consumer Protections Code follows ACCAN research in February which tested 100 pre-paid calling cards and found significant problems with 40% of cards.

"ACCAN is pleased the ACMA is enforcing the TCP Code and taking steps to protect consumers from what appears to be a shady operator. Consumers should be told how much it's going to cost them to make calls to family and friends – anything less is unacceptable," said ACCAN CEO Teresa Corbin.

The ACMA issued formal warnings against Lime Telecom Pty Ltd and Skink Marketing Pty Ltd in August for failing to make Critical Information Summaries (CIS) available as required by the TCP Code. Skink has since become compliant with the Code.

ACCAN's research found the calling cards with the most significant problems included complex and hidden fees and charges, the number of minutes provided being significantly less than the number advertised, faulty cards and poor call quality and connections.

"This is a real problem because you're coupling shonky practices with vulnerable consumers from non-English speaking backgrounds. ACCAN has created tip sheets in 8 different languages that help consumers make the right decisions," said Ms Corbin.

What's a Critical Information Summary (CIS)?

A CIS is a two-page summary that provides consumers with information about products, plans and services so they can easily compare offers. Providing a CIS became a requirement under the TCP Code from 1 March 2013. Example of a CIS: http://www.acma.gov.au/webwr/_assets/main/lib311902/critical_information_summary-mock-up.pdf 

Key stats about ACCAN's pre-paid calling card research:

  • 48% of cards applied a daily service charge or fee once the card is activated
  • Only 28% of cards had any sort of in-store information about rates, terms and conditions
  • 94% of salespeople couldn't give the customer any information about calling rates
  • 7% of cards could not be activated
  • 9% had poor call quality
  • With 23% of cards the number of minutes provided was significantly less than the number advertised.

The worst terms & conditions we found:

  • Calls are charged in blocks of 15 minutes, even if it's only a one-minute call
  • 75c service fee every 2 days regardless of whether you use the card or not, which cancels out the three-month expiry period ($10 credit will be used in one month)
  • A surcharge between 20c and $1.50 after one minute
  • A 79c flagfall for all calls

Consumers should look out for the following:

  • Check the Critical Information Summary (CIS) at the store or online for additional charges before purchasing.
  • Calls that aren't charged in regular per-minute blocks (some charge for 15 minutes even for a 1 minute call).
  • Additional 'service fees' of up to 75c are charged every two days on some cards, even when not in use.
  • In addition to 'flagfall' and call rates there are often additional surcharges throughout the length of the call (eg: $1.50 after 1 minute).

ACCAN's pre-paid calling card tip sheet can be found here: https://accan.org.au/index.php/broadband/broadband-tips/525-how-to-choose-a-pre-paid-calling-card