Telecom called over phonecards

Pre-paid phonecards will soon be worthless. Should Telecom pay up?

By Mary Jane Boland

consumer issues reporter

Telecom is under fire for its use-it-or-lose-it policy on customers' phonecards, which will be obsolete by the end of this year.

Millions of dollars may be tied up in the cards, due to be phased out between July and December when the firm replaces 4500 public payphones, which are not Year 2000-compliant.

Telecom will not give refunds or replace customers' phonecards with new smartcards because it says consumers have ample time to use up the remaining value on their cards.

But its transtasman counterpart, Telstra Australia, has spent 16 months replacing customers' old cards with smartcards for new payphones.

"There was never a situation where Telstra was going to leave customers with the card they had paid for that they wouldn't be able to use in some way," said Telstra spokeswoman Julie Stragalinos.

Politicians and the Consumers' Institute want Telecom to recompense consumers. Ministry of Consumer Affairs staff will meet the firm next week to discuss its plans.

The general manager of the ministry, Keith Manch, said he did not believe Telecom was specifically breaching consumer laws and was happy the firm was providing warnings to customers.

But the ministry was investigating further and considering the contract between Telecom and its phonecard customers, he said.

A Telecom spokesman, Glen Sowry, said the firm was happy to cooperate with the ministry.

"We are confident that we are operating within the requirements of the [Consumer Guarantees] Act and have given customers ample opportunity to use remaining value on their payphone cards."

Mr Sowry said reports the cards in circulation were worth $19 million was "pure speculation" and it was difficult to estimate their value.

The chief executive of the Consumers' Institute, David Russell, said customers had bought the phonecards in good faith and Telecom should provide a replacement.

A New Zealand First spokeswoman, Robyn McDonald, said Telecom should honour prepaid phonecards, as it had known about Year 2000 bug implications since at least 1997.