Wellington, Sept 29 NZPA - The Commerce Commission is scrutinising prepaid phonecards that offer discounted national and international landline calls.

The commission said it had received a small number of complaints similar to those in Australia, where Australian Competition and Consumer Commission had recently taken three phone card companies to court for misleading customers, The Dominion Post reported.

The commission here was looking to see whether the Fair Trading Act had been breached.

Phonecards offer cheap rates by routing calls over low-cost internet connections.

However, Australian consumer advocacy group Choice warned of hidden fees with some cards.

One had a "disconnection fee" of 15 cents for every call lasting more than five minutes and billed customers an additional 300 seconds for each call, with no explanation.

"It's as if some of these companies have a competition going to see who can come up with the most unwarranted charges possible and then give them strange names so they can advertise they have no connection fees," spokesman Christopher Zinn said.