Phone-card seller misled customers: ruling
Last Updated: Thursday, November 5, 2009 | 3:16 PM ET
CBC News
The Competition Bureau has fined the long-distance phonecard firm, Phonetime Inc., for misleading advertising. (Associated Press)An Ontario-based company that sells prepaid long-distance phone cards has been fined $300,000 for misleading customers about rates.
The Competition Bureau found that Phonetime Inc. misrepresented its per-minute-rates through confusing fine print on advertising posters in stores where cards were sold.
"Consumers were not able to determine the true value of the card," said Tim Rissesco, acting assistant deputy commission for the Competition Bureau.
"There were so many different conditions at the bottom of the poster that it would be difficult for a consumer standing at the corner store to determine how much they would pay per minute," he said.
Consumers received fewer minutes than advertised, paid higher per-minute rates and faced hidden fees, the bureau found.
The Competition Bureau began investigating Phonetime Inc. in 2006 when complaints began trickling in. By 2009, more than 80 complaints had been lodged against the company.
Phonetime was ordered to offer refunds of 78 per cent to customers who bought Bravo! and Bravo! Atlantic cards. That means a refund for a $10 card would work out to about $7.80. However, Rissesco agreed it was unlikely most people would have kept their old cards and receipts, especially ones purchased in 2006.
This is the second time a long-distance phonecard company has been fined by the Competition Bureau. In 2004, Goldline Telemanagement Inc. was ordered to pay $750,000.
"The Bureau has clearly communicated its concerns to the phone card industry and any company found to be misleading consumers could become the target of an investigation," Andrea Rosen, Deputy Commissioner of Competition, Fair Business Practices Branch, said in a statement.
As part of a consent agreement reached between the bureau and Phonetime, the company has also agreed to publish corrective notices in major and community newspapers.
