Scams of the Telephony Trade

The Headline Price

This is the one in big print shouting at you. It's the draw, the hook, the snake oil, the scam. It says something like, "mobile calls 5p per minute!"

Here's what else you need to know to decide whether that's a good deal or not.

Is VAT Included?

If it's a business site you're looking at, VAT is usually excluded - but it won't always be obvious and it's always a bad sign if the telco isn't telling you.

Call Set-up Charges

Telcos often want you to pay up front for something that actually costs them nothing and gives you nothing in return. This nothing is the call set-up charge. This is a BIG deal for all the major brands - BT, Virgin, Talk Talk etc - and can be as much as 15p, after which they add the pence per minute charge.

One major brand advertises mobile calls at 12p per minute but has a call set-up charge of 15p, this means that your first 60 seconds costs you 25p, not the headline 12p.

You can bet that they won't explain this in clear sight, so go look for it.

Minimum Charges

Most telcos have a minimum call charge - it's shouldn't be much more that 1p these days but it can be. If you operate a call centre and a lot of your outbound calls hit answering machines, or you're hung up on regularly, this number will be very important to you. (But a small minimum call charge is fair in my opinion, as it is reflects some of the telco's incurred costs and prevents abusive short duration calling by machines.)

Minimum Call Duration

This is the practice of charging per minute (or other duration) instead of per second or fraction of seconds.

It's the sneakiest of sneaky hidden charge because it seems ok but if you call mobiles or exotic destinations it can be nothing but a huge rip-off. If you see call prices to UK mobiles that look very good value (ie are cheap) they may well be using this trick. It means that every time your call goes to voicemail you will pay them 10p - or whatever.

As the average duration of a business call is between 1 and 2 minutes (surprising isn't it?) it means that a large proportion of your calls are going to be less than 1 minute - but you'll be charged for a whole minute anyway! If your calls go over a minute, you'll always pay for the next whole minute - a call lasting 61 seconds will be charged at 120 seconds. This makes that 5p per minute headline utterly misleading.

Capped Call Charges

This is my favourite scam because it's seems such a good deal whilst simultaneously being a rip-off. The deal will look something like:

"Mobile calls cost only 10p per minute capped at 25p for up to an hour."

This is clever because it seems great to have a hour for 25p. But we're forgetting that the telcos have studied their numbers; an average business call from a mobile is around 90 seconds, so on average, you're not getting any value from the deal - it's purely marketing hype.

Charging Increments

Almost everybody charges by the second these days and it's normal to round up to a whole second - but you never know, someone out there may still be using 5p unit fees...

Call Packages

Some companies protect themselves from greedy customers by selling packages of say 500, 1000 and 2,000 call minutes (this includes Voipfone). These can be good deals if you are a heavy user as they normally offer a good discount over non-package prices. But to get the full benefit you have to use them all up in the month - unused minutes do not normally roll-over into the next month - and they are usually charged on the whole minute method as described above.

There's nothing wrong with this kind of call discount package, so long as you're warned properly, in advance of purchasing them, that the unused minutes are lost every month.

Minimum Annual Payments & Minimum Call Volumes

Some companies require you to have a minimum number of calls per month or minimum payment over a given period, otherwise top-up charges will apply. This is not usually obvious when you're considering the service.

The Swings & Roundabout Trick

The headline price shouting at you is often a loss leader, disguising the fact that other calls are very expensive, so you get one cheap call but 5 expensive ones. So check the other frequently called numbers too - 0845, 0870 and even 01 and 02. (I'm looking at a big name brand that's advertising cheap mobile calls whilst charging 9p per minute to call an everyday local number!)

Don't forget - it's the total call bill that counts, not a single call charge.

International Calls

Most of us don't make many international calls unless we have family or offices in other countries so we often don't notice the cost of calls outside the UK. Telcos know this and often price accordingly - a few calls to ‘exotic' destinations or international mobiles can wipe out any savings you might think you make by choosing a telco on one headline price.

Contract Term

Almost all traditional telcos will try to get you to sign up for long contracts - from 12 months to 7 years. But they are not obliged to keep their prices constant over that period. These days you don't need to sign up for contracts exceeding 12 months and many have no contract at all.

How to Compare Telephone Call Charges

Because of all the tricks used above, it's actually very difficult to compare call prices - which is, of course, the reason why it's done. The only reliable way to do it is by getting a download of your itemised call bill and then re-price each call with the new service you are considering. Not easily done.

But before you go to that length, you first need to know whether the company you're considering is reputable and can be trusted - this is far more important than shaving a few quid off your call bill - your business may depend on it.

Have a good look at their web site. Does it look honest? Are they giving you straightforward information about their charges that you don't have to search for? How much small print is there? How many asterisks and footnotes? Call their customer services number - if you can find one! - do they answer quickly and can they give you clear pricing information? Check the review sites - what are they saying about the company?

In the end, it's not just a cheap calls that you need, it's a good, reliable, honest service that won't let your business down.