Watch those calling card minutes
A federal lawsuit was filed earlier this month by IDT Telecom Inc., and its pre-paid telephone calling card subsidiary, Union Telecard Alliance, against 10 competitors, claiming the companies were part of a “massive and systematic scheme” to “cheat calling card customers by not providing them with the calling card minutes” promised when the cards were purchased.
On the surface, this sounds like sour grapes from a company which admittedly has seen its revenues shrink in the face of increasing competition. But part of the company’s pleadings includes what it says are the results of its own survey, validated by an independent investigation that included IDT’s cards and those of its competitors.
The company alleges that, on average, its competitors’ cards delivered approximately 60 percent of what was promised in the advertising and in the voice prompts. It contends the cards are often “tricked up” by fees and charges that prevent a consumer from using all the advertised minutes. Many cards have connection fees, sometimes called a “connect surcharge,” “per-call maintenance fee,” or “disconnect fee.” If such charges are not taken into account when calculating the minutes, it creates a false impression that the actual usage can be delivered.
IDT, which sells its cards through Walgreen’s and other retailers, is contending its sales are eroding partly due to competitors who were “flat out lying” about the minutes their cards can deliver.
Regardless of the validity of IDT’s allegations, it serves as a reminder to be a careful shopper when purchasing telephone calling cards and make sure you read the fine print – if there is any – about special fees or charges that might reduce the amount of advertised minutes.