Ofcom investigates pre-paid international calling card company

An investigation has been launched into the UK’s biggest pre-paid international calling cards seller by Ofcom, after it was found that they may have broken protection laws for consumers.

Ofcom officially started the inquiry this week after complaints were issued with Consumer Direct and its advisory team.  The decision to launch the investigation was made after a discussion with the Trading Standards Offices which also stated that they received complaints.

The communications watchdog plans to take a close look at Lycatel Distribution to see if they have broken any consumer protection legislation by looking at the company’s advertising practices, in which the calling cards are marketed to consumers as a way to reduce the cost of international calls.  Most of the time cards and advertising is aimed at the immigrant population.

If the company is found to have infringed rules it may get a fine that reaches up to ten percent of its total revenues.  On the other hand, if it has broken the consumer laws, then it may have to face a judgment in court.  This situation may occur if the company has introduced unfair terms and conditions, less minutes are given than advertised, and if customers were overcharged.

Outside of looking at infringements of consumer law, Ofcom also plans to look closely at Lycatel to see if they are in compliance with new regulation to publish clear information about its terms and conditions and prices.

A Lycatel spokesman stated that the group is going to be in contact with Ofcom in order to quiet their concerns.