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Posts Tagged ‘Calling Cards’

Calling Card Scams, Tricks, and Hidden Fees

Posted by Gary on July 25, 2008

The extremely high cost of long distance calling from our family’s cell phones has been the main reason that, until recently, we’ve held off on canceling our home phone line.  Like many others, we’ve come to realize that our cell phones have become our primary phones and our home phone has been relegated to occasional long distance calling.  The regular monthly bill for our home phone reminded us again last month that we should conduct some research to find a good option for long distance calling from our cell phone and do away with our home phone altogether. 

We’ve never been fans of calling cards, finding them to be just too much hassle.  Given the renewed motivation to toss the home phone, they seemed to be the obvious solution for occasional long distance calling from a cell phone.  Cheap too – we saw advertised rates, on card faces, of under one cent per minute to North America.  Almost too good to be true compared to the 30 cents per minute our cellular carriers charge for the same long distance calling destinations.

Anything too good to be true typically is just that, too good to be true.  If you flip calling cards over to view their back, and if you strain to read the fine print at the very bottom, and then persist to read it to about the two-thirds point, the published hidden fees begin to show up.

Published hidden fees such as:

  • Connection Charge.  A fee on the first minute of the call that is 6 to 10 times higher than the advertised per minute rate.
  • Minimum Call Charge.  A minimum charge per call.  On the cards that we reviewed, this equated to a minimum 4 to 6 minute call.
  • Two minute rounding.  We were completely surprised by this minute increment.  The card balance decrements in two minute increments!
  • Aging.  This is where the remaining card balance automatically decreases every day after it is first registered, whether you use it or not.

How does anyone ever know what they are really paying per minute with all of these additional varying charges?  We applied the rate structure, to the best that we could understand it, from one of these cards to a small sample of our recent long distance calls and discovered that instead of paying the 0.9 cents per minute on the face of the card, we were averaging over 8 cents per minute.  Just ridiculous.  Why do people keep buying these cards? 

On top of these published tricks, we learned that there are also many unpublished tricks.  Cards can be set to count a minute every 45 seconds.  Others have hidden time of day premiums, cell phone premiums, payphone premiums, and who know what else.

We are surprised that this industry exists in the way it does and with its apparent size.  There must be a study on human nature in here somewhere.  The gullibility of humans and how the species prefers a nice simple number while comfortably ignoring the pickpocket on its back.

To cut a long story short, we obviously passed on calling cards, we continued looking for alternative solutions and we found one in a cell phone long distance service from a company called Alligato Mobile.  The service seemed very straight forward on their web site, the rates were very good, and it was easy to sign up.  We’ve been using it for almost a month now and so far so good.   It is easy to use and the call quality is good.  We haven’t received our first bill yet and that will probably be the real test of whether we get what we think we bought.  We will keep you posted.

UPDATE AUG 3, 2008: We received our first bill from Alligato a few days ago and it looks very straightforward.  Each long distance call we made, minutes per call times the per minute rate.  Plus GST and PST.  No other charges or hidden fees.

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