Prepaid Calling Cards

In June 2004, a long-distance prepaid calling card company sought a written opinion on the application of the Competition Act to the proposed marketing representations and promotional plans for its prepaid telephone calling cards.

The Bureau examined the proposal under both the criminal and civil false or misleading representations and deceptive marketing practices provisions of the Act. It was unable to determine whether the proposed material for two calling cards provided sufficient grounds to launch an inquiry because the relevant information was not clear about how charges would be applied to these cards.

With respect to the promotional materials for the other three cards, the Bureau's opinion was that there were sufficient grounds to launch an inquiry under the false or misleading representations and deceptive marketing practices provisions of the Act for the following reasons.

• The materials contained fine print disclosures contradicting the general impression created about the advertised rates and the telephone minutes available.
• The materials used ambiguous language that could mislead consumers when choosing the products.
• In some cases, it appeared to be impossible to achieve the long-distance minutes advertised.

More details about these written opinions can be found on the Bureau's Web site .