International Calling Card Rip-Off

April 28, 2017

New research of top calling card brands finds up to 78% of advertised value is not delivered

Introduction

International prepaid phone cards are commonly used by immigrants and travelers who call family and friends in other countries. They seem to be a low-cost method for international calls: customers simply dial a “local access number” plus the destination number, turning a long distance call into a lower cost local call.

However, according to the FCC, “Many prepaid calling cards have ‘fine print’ and undisclosed fees”* and there’s a good chance that they are not nearly as inexpensive as advertised.

QuickCall conducted qualitative research to determine whether current providers of prepaid calling cards are providing clear information about charges to consumers, and whether consumers really get what they are promised.

Objective

The research objectives were:

Click to download full research PDF

• Test the cards’ performance: did they fulfill the advertised terms and conditions?
• Understand what information is disclosed (i.e. terms and conditions)
• Test accessibility of customer service and their ability to resolve issues

These companies often had more than one card in their offering – we looked at a total of 30 cards from these brands.

Method

A qualitative sample of cards were randomly selected from a number of providers, purchased both in-store and online according to availability in May 2016 (not all cards could be purchased both online and offline).

Independent testers made calls from US mobile phones to eight countries (India, Ghana, El Salvador, Kenya, Italy, New Zealand, South Korea and China).

Calls were made to a mix of landline and mobile phones, during business hours. All cards were exhausted using a single call or in a series of calls on a single day.

Customer Experience: More Negative than Positive

Overall, the testers had more neutral or negative experiences than positive: many had difficulty placing and connecting calls; there was wide variation in how long the cards lasted across single or multiple calls; and some charged fees for calls that didn’t even connect, which was not revealed in the fine print. Additionally, for some calling cards, rates calling the same destination were not consistent, even placed within a close time span – i.e. rates after the first call were significantly higher, with no reason provided.

DollarPhone: charged nearly $2 for a call that didn’t go through; rates of sequential calls increased, about 60% higher than first call

SMT: charged approximately $0.50 for each call that didn’t go through.

STI: about 30% higher fee for subsequent call

Dezco Communication: about 10% higher fee for subsequent call

Findings: Promised Value Rarely Delivered

“Administration” fees are common; in an extended time period, delivery of advertised minutes might be even lower, depending on company and time elapsed. Our research calls were made within two days, so many of the cards didn’t deduct the maintenance fee when balances were checked.
Indeed, it seems that there is a “ripoff” element in both paper and digital international calling cards. In most cases, the amount paid for a card (e.g. $5 face value) did not translate to minutes available. The minute the first call was attempted, the clock was ticking and fees assessed.

The worst performer, DollarPhone, provided less than 25% of its advertised minutes during the test. The best performers, Dezco and Nobelcom, delivered 98% and 99% respectively.

Transparency and Information Provided

Most of the company websites or collateral do not provide any information regarding specific call rates, nor the number of minutes used on calls.

Generally, on-card information is limited to access number and PIN, dialing instructions, expiration date, and customer service contact information. In most cases, they are easy to find and understand. (We noted that AmanTel didn’t share its expiration information on the website.)

Additional fee structures are mostly revealed on the cards but often are complex and difficult to interpret – particularly given the potential for language barriers in ethnic customers.

Confusing and Complex Fees and Terms

The amounts of fees vary from different brands and even within same brands on different cards. In general, most cards charge a complicated combination of connection fees and/or completion fee and/or maintenance fees.

A sample of fees assessed by different providers:

• Dollar Phone charges service fee of $0.25 per minute
• STI charges “disconnection fee” of $0.90 on calls less than 5 minutes
• Noblecom.com and AmanTel charge online order processing fees (up to $2 on a $5 card)

All had expiration dates and varied in duration. Most cards use “rounding-up” which also impacts the final price of a call. For example, if a call ends after 1 minutes 20 seconds (at a rate of $.50/minute), some providers may round up to 3 additional minutes (totaling a 4-5 minute charge) – adding an extra $1-2 more than a provider who only rounds up to the nearest minute.

Information Provided to Customer

There is no standardization of fees and terms, and limited disclosure on some cards. Below, the absence of disclosed information does not necessarily mean there is no fee.

Customer Service

The accessibility of customer service varied during our research; three calls were simply not answered or the call went directly to voicemail. When customer service was reached, nearly all companies provided assistance as asked.

Call Quality

While it’s common to have variations in international call quality, the card testers’experiences were poor. Complaints fell into four categories.

Tester Feedback

Conclusion

Consumers seeking a solution to make international calls would do well to steer clear of calling cards, given the many new technologies and methods of calling globally available to them as an alternative. The additional fees, short expiration dates and inconsistent rates add up to significant value loss.