Ofcom, the telecoms regulator, has launched an investigation into Lycatel to gauge whether the calling-card provider is infringing consumer protection laws.
The regulator has initiated the inquiry after complaints from Consumer Direct and the Trading Standards Office.
It will determine whether Lycatel is providing its customers with clear and up-to-date information about its terms and conditions.
If the company is found to have overcharged its customers and failed to comply with regulatory guidelines, Ofcom could fine the company up to 10 per cent of its revenue.
Related LinksO2 hopes to steal march on rivals and SkypeO2 buys internet call specialist JajahOfcom seeks to ease mobile phone switchoverThe company is one of the largest players in the international calling-card market and has five million customers worldwide.
It competes with the likes of Lebara in targeting immigrant and ethnic communities with cheap international calls.
Despite the rise of services such as Skype and O2"s Jajah that offer cheap international call rates, the international calling-card market in the UK is still vibrant with 150 million cards sold every year and 3.7 million customers.
However, the calling card market has historically offered poor customer service, and people buying cards with a value of between 5 and 20 have often complained that they do not receive the value they expected.
Ofcom cracked down on the industry in 2005 to weed out companies that routinely took advantage of customers.
No comments:
Post a Comment