Consumer Watchdog Exposes Calling Card Industry


You want cheap calls overseas? We all do. But for the longest time the giant telco companies have (and still do) hold their customers hostage with their overseas pricing costs.

This has opened the door for calling card companies to come in and offer an alternative solution in the form of reduced calling rates, sometimes up to 90% in fact! This is an amazing deal but with those types of discounts you’re invariably going to run into issues.


Back in 2015 consumer watchdog Australian Communications Consumer Action Network released a report detailing their findings about the calling card industry some of which were quite shocking.

In this article, I’ll cover off 3 data points and give my perspective from my time working inside the calling card industry.

Let’s dive in.

48% of cards applied a daily service charge or fee once the card is activated


The calling card industry operates on a razor thin margin largely because of the box it has placed itself in which is the promise of delivering international calls at much lower rates than the big telco providers.

“Super cheap call rates will almost always come at an additional cost to the customer.” – JT,

As soon as you start using the word ‘cheap’ you start down a very slippery slope to see which calling card company can withstand super slim margins.

In order to counter this, calling card providers are forced to brainstorm creative methods for recouping and padding out those margins so they can stay in business.

One of those methods is applying service charges.


According to close 50% of the calling card options available to consumers charged an additional daily fee upon activation which serves no additional benefits to customers and is more a way to drive profit.

My advice is to avoid calling cards that come with service charges. If a company is going to take additional money from its customers then there should be some additional value-add.

Only 28% cards had any sort of in-store information about rates, terms and conditions


If you step into a retailer that offers phone cards then chances are, you’re not going to see the calling rates clearly displayed anywhere.

This is either poor marketing or an attempt to conceal pricing from the calling card service provider.

Some players inside the phone card industry will try various tricks to hide pricing either through no pricing materials at all to using different units of measurement instead of currency for example instead of charging you 3 cents per minute they might charge you 1 monkey banana per minute which is sometimes used to make it more difficult for the customer to know exactly how much they are spending.

Typically, though, the phone cards themselves will give you the calling rates, or at least point you to a website where you check the rates.

My advice is to only purchase calling cards that offer clear and easy to understand calling rates and on top of that ask the retailer that if you are being overcharged what the stores policies are?

Alternatively, I’d recommend using an online calling card provider since you will be able to find all of the information you need in addition to a customer support team who can help you clarify any other questions you may have.

94% of salespeople couldn’t give the customer any information about calling rates


Unfortunately, when dealing with retailers they will often be selling hundreds of different products and so will not be able to give you the calling rates.

To be honest, there are so many in’s and outs when it comes to purchasing a phone card I don’t really blame the store owner.

They think they’re just selling a card that gives cheap overseas calls and the customer is thinking along those same lines the reality is that it can be a little more complex.

For example, they are likely selling dozens of different phone cards where they need to know:

  • Calling rates to specific countries
  • Calling rates to mobile
  • Calling rates to landlines
  • Calling rates to specific cities
  • Special charges and hidden fees some cards will have them some will not

Along with knowing how to answer questions like:

  • How do they work?
  • What cards are best for which country and to what device?
  • What if you are calling to multiple countries, which combination of cards is best or is there a one card that can offer an ok rate across all countries and devices.

That’s just the beginning, imagine having to know all of that information on top of the things they are already selling in-store.

It is up to the calling card companies to provide this information so the customer can make the bet choice in addition to offering a customer support team to ask the more trickier questions.

My advice here is to see if the cards have a customer support team available to ask these questions so you know which phone card to grab off the counter.

Alternatively, jump online and check out the online card providers since most of the questions you have will be available online and they will have a customer support team on standby.

9% had poor call quality


In other words, 81% of calls actually had good call quality.

This isn’t bad actually, especially when you consider that customers are buying a cheaper alternative to their existing telco provider costs.

Name another business where you can get up to 90% off without having a reduction in quality?

The reason why the call quality is generally not as good as the big telco companies is that the calling card companies are buying cheaper call carriers this is why they are able to offer such low calling rates.

If the card companies were using the same carriers then you’d be paying the same price as making a call from the big companies.



The best advice I can give is ‘do you own research’ there are some calling card companies that are using less than ideal business practices but ultimately the job is on you to do your research to make sure you’re making the best buying decision.

I would recommend using an online calling card provider for two main reasons:

  1. The calling rates, FAQ other information will be on the site.
  2. They will have a customer support team ready to answer your questions (avoid companies that do not have a customer service team in place.)