Competition Bureau Requires National Phone Card Supplier to Pay Refunds and Penalty

OTTAWA, November 5, 2009 — The Competition Bureau announced today that Ontario-based Phonetime Inc. will offer refunds to consumers who bought Bravo! and Bravo! Atlantic prepaid long-distance phone cards. The company will also pay $300,000 in penalties and costs.

This resolution follows a Bureau investigation into misleading representations relating to Phonetime’s advertising of prepaid long-distance phone cards, including hidden fees and higher per-minute rates and fewer minutes than advertised.

Consumers who purchased Bravo! and Bravo! Atlantic cards can obtain refunds of most of the price with proof of purchase. Further details are available by contacting Phonetime at 1-877-404-0046. As part of a consent agreement reached between the Bureau and Phonetime, the company has also agreed to publish corrective notices with this information in major and community newspapers.

"This is the second case involving prepaid long-distance telephone calling cards that the Competition Bureau has investigated and resolved," said Andrea Rosen, Deputy Commissioner of Competition, Fair Business Practices Branch. "The Bureau has clearly communicated its concerns to the phone card industry and any company found to be misleading consumers could become the target of an investigation."

The Bureau has contacted providers of prepaid telephone calling cards across Canada in 2008 to remind them of their responsibilities to disclose accurate information on the cards and in any related advertising material. At a minimum, businesses should:

• disclose the effective rate per minute and the number of minutes available on the card;
• disclose any conditions that might adversely affect the advertised rate per minute and number of minutes near the main body of the representation – this information should not be printed in a small font or appear on a background that obstructs its visibility;
• discontinue the use of fine-print disclaimers that contain information contradicting the main message – the main body of the representation should not be misleading when read alone.

Consumers who suspect they have been a victim of deceptive marketing practices or who want information on the application of the Competition Act should contact the Bureau’s Information Centre at 1-800-348-5358 or visit www.competitionbureau.gc.ca.

The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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Greg Scott
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