Consumer: Prepaid calling cards

By Sven Eriksen
July 02, 2003
As of recently, Canadians have been forced to shell out big dollars for long distance fees, domestic and international. Which somewhat broke up when the Canadian market was deregulated (varies according to your province). A suitable example of this is the growing competition across North America are Sprint and Primus. Two companies who, undoubtedly came in for the kill when the monopolies were forced to reduce rates to acceptable levels. This has proven a consumer-friendly marketplace.

On to the original topic. Prepaid calling cards. Very noticeable in almost any convenient store or bus terminal are these little plastic or cardboard cards with a pin number and local dialup number on the reverse. Domestic and International calling at extremely low prices. As an example is $0.01 per minute calling to anywhere in Canada. Or $0.025 per minute to call Germany, Austria and Switzerland.

Low long distance rates as advertised by prepaid calling card companies are higher than advertised

You purchase the card, available in $5 - $10 - $20 and even $50 denominations. The more you spend, the more you save.

Before you purchase the card, READ THE FINEPRINT on the back of the card and on the corresponding poster. If you spot the following phrases: "Connection Fee", "Rates subject to change without notice" or "Rates are only valid while calling select cities", refrain from wasting your money on this product.

The way it works is carriers (such as Bell Canada or Telus) will sell blocks of time to third party distributors, which will then sell smaller blocks of time to service providers (the company which produces the card, the PIN and the 1 800 numbers). In the end, you're buying long distance time from a fourth party. It's not abnormal for these calling card companies to be a scam from the start, or just a fly-by-night bankrupt business.



Canadians being scammed by prepaid calling card companies

I did a test on a random card I purchased from a convenient store near Toronto, Ontario. The card I purchased was a Callvalue $5 card which promised me $0.01 per minute to anywhere in Canada and $0.025 to Austria. There was fineprint near the bottom of the poster which I couldn't quite make out very well. My first test was a call to Vienna, I dialed 011 plus the country code (43) plus the city code and the number. I was amazed to see that a $5 card that promised $0.025 per minute only provided me with 12 minutes! (that's about $0.42 per minute compared to about $0.03 per minute). I wasn't going to let the call complete, I still had to complete my test.

The next phase includes domestic calls. As promised, my calls to some Canadian cities we're only $0.01 per minute. Apparently, there is no connection fee. I dialed Kamloops, BC at a 250 number without incident. Still, only 1 cent per minute. Short conversation went on there to BC. I then dialed a long distance number within my own province to Barrie, Ontario. Well, the rate has now doubled to $0.02 per minute, never the less, still a great rate compared to typical cell and landline rates.

I was somewhat satisfied with the service provided. I didn't make any calls on the card for about 5 days until I had yet another long distance call to make. With $4.00 left on my card, I called up, entered my PIN number and boom! "You have insufficient funds to complete this call". I didn't dial a number yet. I had $0 left on my card.

The moral of the story is you get what you pay for. Unless you know who you are buying phonetime from, don't waste your time or money on a service you will not receive. A little note about the above, I contacted customer service by the 1 800 number from the back of the card. I left a message on their answering machine explaining my situation. It's been 10 days, and still no call back. I think the fact that there is no human in their 'office' to answer my inquiry at 1pm on a Monday explains the situation completely. Subsequent attempts have proven unsuccessful.

There is a lot of choice in what you purchase. Although you may have to shell out a bit more money for your minute, a safe alternative is purchasing prepaid calling cards from well-known companies such as AT&T and Bell Canada respectively.



Followup:
I was recently contacted by Joanne Grise, the products coordinator at an Ontario based prepaid calling card company, RSVP Telecommunications. After reading this article, they felt it was unfair I did not include any good stories behind prepaid calling card usage. Unfortunately, I didn't have any myself. So she sent me some complimentary calling cards to try out for myself.

The two types which I was sent were "RateBuster Classic" and "RateBuster Plus". The difference between the two is one has a connection fee ($0.49) with a low per-minute rate ($0.095/minute) and the other one has a standard $0.19 per minute to anywhere in North America without any connection fees. Both cards have different customer service numbers.

I was pleased to find out that the calling cards did not drain themselves in a matter of 3 days, and that I really could talk to a real person for customer service. In all honestly, though, I had trouble getting solid information about the calling cards and other calling cards available. Or the actual name of the company reselling the time.

I found the person on the "Classic" to be a little more friendly and helpful than the one from the "Plus" card. But I'm happy I was able to speak to a real person, and the RateBuster gets a thumbs up for that. Unfortunately, RSVP Tel does not have much control over the customer service standards used with the "Plus" card, as they are simply a reseller of cards.

The rates are reasonable and the customer service exists. So there are two sides of the industry, and it's better to do some research before purchasing a $50 card you will see very little use from.

Thanks to Joanne Grise for pointing this out to us.

You can find more information about RSVP on their web site located at rsvptel.com.


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