[the guardian] The telecoms watchdog Ofcom has launched an in-depth inquiry into Lycatel, one of the largest players in the UK's booming market for pre-paid international phone cards, which could result in a fine running into tens of millions of pounds.
Lycatel's phone cards, sold under a variety of brand names including Habibi, Cobra and World Call, allow people to make cheap-rate international calls from any phone. But Ofcom said it has received complaints from consumers who believe they have been cheated. Consumer Direct, the government-funded advice service, has also received complaints about the company's cards.
Ofcom said it has discussed Lycatel's terms and conditions and its advertising practices with Trading Standards and "the investigation will now consider whether Lycatel has engaged in conduct which infringes any relevant consumer protection law". The regulator is also looking to see whether the company publishes clear and up-to-date information about its prices and terms and conditions.
In a statement Lycatel, founded by its Sri Lanka-born chairman, Subaskaran Allirajah, said it "has consistently provided its customers with great quality international calling at competitive prices" and will co-operate with Ofcom.
Phone card firm Lycatel under investigation - Mobile phone card seller faces fine of millions if Ofcom finds grounds for customer complaints