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Federal Court declares phone card advertising misleading

The Federal Court has declared Prepaid Services and Boost Tel engaged in misleading conduct and false representations concerning the benefits of their phone cards. phone card advertising

Prepaid Services, a wholly owned subsidiary of Optus Mobile, and Boost, a company that but buys telecommunication services through PPS were alleged by the The Australian Competition and Consumer Commission (ACCC) to have contravened the Trade Practices Act.

The phone card sellers were alleged to represent certain phone cards as providing consumers with a specified amount of call time, when that was not the case and that no fees, other than timed call charges, would apply when in fact other fees were charged.

The ACCC will continue to promote truth in advertising and the phone card industry, says ACCC chairman Graeme Samuel.

“The ACCC has been active in promoting truth in advertising in the telecommunications industry and this action against Boost and PPS in the phone card sector of the market highlights that the ACCC will take court action where companies make misleading representations,” Mr Samuel said.

PPS and Boost were also declared to have represented that a specified rate per minute would apply to calls regardless of the number and length of calls made, when in fact the specified call rate was highly unlikely to be ever achieved.

For example Boost represented that its card offered 1896 minutes of talk time to various countries including the UK and Japan at a flat rate of half a cent per minute. Yet the minutes could only be obtained in exceptional and unlikely circumstances, such as one continuous call over 30 hours long or through a series of calls exactly one or five minutes in duration.

The court has declared Boost’s conduct was false and misleading, has ordered injunctions to prevent similar conduct in the future, ordered Boost publish corrective notices, and to pay the ACCC’s costs. The court has also made declarations and similar orders by consent against PPS.

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Julia Clarke

Julia Clarke

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