Lycatel investigation to help regulate sector

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Lycatel sees benefits for calling card sector after Ofcom investigation into advertising practices

International calling card company Lycatel said it is pleased to be working with regulator Ofcom to regulate the sector after an investigation into its advertising was brought to a close.

Ofcom opened an investigation into consumer complaints about Lycatel’s terms and conditions and advertising practices in March, which found advertisement of Lycatel’s international calling cards potentially breached the Consumer Protection from Unfair Trading Regulations 2008 and the Unfair Terms in Consumer Contracts Regulations 1999.

As a result, Lycatel has agreed to clearly state the headline number of minutes consumers will receive and that minutes are reduced by certain fees and/or charges in a manner which is clear and understandable. It will also provide consumers with material information in a manner which is clear, intelligible and unambiguous, such as on connection fees, maintenance charges and post call fees; ensure that material information, such as terms and conditions, is displayed in clearly legible font; and not use the post call fee term in its current form.

Lycatel has not been fined, despite reports earlier this year that it could be hit with a fine for up to 10 per cent of its turnover, and will undertaken to replace its existing advertisements in the market place by the beginning of December.

Lycatel marketing director Rob Beswick said rather than being a negative, the investigation has brought positives that will benefit the industry and consumers, including ongoing dialogue with Ofcom to help regulate the calling card market. Ofcom has said it will be monitoring other suppliers of international calling cards to ensure they deliver clear and accurate information to consumers.

Beswick said: “The communication of terms and conditions has to be clearer and more understandable for a layman, which is a good thing for the industry.

“Ofcom recognised us as the market leader and investigated us as a means to make this an industry-wide initiative. We’re pleased because it puts us in a position of working with the regulator to be able to lead the market and deliver a better consumer experience.

“This has set a benchmark that will trickle down to the rest of the industry.”

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