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Time for ACCC to act on phone cards.



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Laurie Ferguson Shadow Minister for Consumer Affairs Shadow Minister for Population Health and Health Regulation

1st of March 2006

Time for ACCC to Act on Phone Cards

Mr Laurie Ferguson, Shadow Minister for Consumer Affairs welcomed the Federal Court’s decision to award $3.5 million to 23 small businesses following Australian Competition and Consumer Commission (ACCC) action against Global Pre paid Communications, In-Touch Networks and companies they represent.

Mr Ferguson said “This is an important decision which sends positive signals to the telephone cards industry to get their house into order”.

Whilst welcoming this decision by the courts, Mr Ferguson said “consumers are being systemically ripped off by countless telephone card providers. An example of some of the problems encountered by consumers is that many telephone call cards claim that callers will be able to speak overseas for 600 minutes. However, strangely the providers do not disclose the very hefty flag fall fee which is charged regardless of whether an effective call was made or not. This has often meant that consumers are only able to use the cards once and for a short period of time”.

“Constituents in very ethnically diverse regions such as Western Sydney are the most adversely affected as they are heavy users of these cards. This problem is especially acute amongst newly arrived migrants with limited English language skills and very limited financial resources”.

“There is very little current regulation compelling card providers to conduct their business in an ethically sustainable manner. This means consumers are left with little recourse or follow up options when they are ripped off”.

Mr Ferguson said “regulation of the telephone card industry is clearly needed. It is time for the ACCC to follow up on their good work and inquire into the direct impact that these cards have on consumers.

ENDS

Contact: Laurie Ferguson 0418 601 716