Charges that sound too good to be true probably are. You may have noticed, in your local newsagent, brightly coloured posters proclaiming phonecalls charges to the US "for just 1p a minute". Talk may well be cheap, but rates like these, advertised for some pre-paid phonecards, clearly warrant closer inspection.

Unitel Communications, a supplier of technology for these cards, recently released a report suggesting that many cards were overcharging by an average of 60 per cent above advertised rates. One card overcharged by 120 per cent.

But there are many ways for the canny consumer to save large sums on international call charges - particularly if they are calling the same countries regularly. The key is to avoid cowboy providers and their many tricks.

The cowboys exist because this area of telecommunications is still largely unregulated. Telephone resellers buy excess calling time wholesale from large "carrier" networks such as BT or Energis and sell this time via retailers in the form of pre-paid cards.

Those wishing to start up businesses as telephone resellers do not have to register or have a license. Telecommunications regulator Oftel and the DTI have not targeted these cards for special attention. So before you go rushing to your newsagents expecting a thousand minutes worth of transatlantic calls for your tenner, check the small print.

This may contain some variant of the phrase "we reserve the right to change prices at any time" - a catchall phrase affording the reseller unlimited room for manoeuvre. The Observer bought one £10 card that guaranteed a rate of 20p per minute to any country. To our bemusement this £10 offered just 40 minutes of call time at the rate of 25p. This is not uncommon.

Quite apart from this, the posters may be out of date, and information is rarely printed on the cards themselves. Some services do not even say how much money is left on a card before each call. So it's a bad sign if there is no customer helpline number on the card. - the reseller is obviously not too keen to discuss tariffs.

A further examination of the small print may reveal any number of caveats, including:

1. Access charges - there may be a one-off charge each time the card is used
   
   
2. Block charges - call time may be rounded up to the nearest minute or two-minute block
   
   
3. Add-on charges for 0800 access,rates advertised refer to residential access paying the local rate
   
   
4. Add-on charges for pay-phone access,charges 12p-15p per min. to access services such as these pay-phones
   
   
5. Advertised charges may apply to higher-value cards only - not £5 or £10 cards
   
   
6. Advertised charges may apply for off-peak periods only  
   
   
7. Advertised charges may be compared only against the most expensive BT rates

Yet those who use such practices still manage to stay within the boundaries of legality. There are more brazen abuses - for example, some resellers' minutes last only 56 seconds, equivalent to a 7 per cent added charge.

Users of other cards report "breaking" - calls stopping in mid-conversation. This may mean paying another access charge to reconnect the call. Call quality has also been brought into question.

More worryingly, there have been a handful of instances of phonecard firms simply closing down. Typically they sell a large volume of high mark-up cards offering rock-bottom prices to retailers. If they close, the cards are useless. The Airtime Carriers & Resellers Association and the European Calling Card Services Association plan to introduce a voluntary code of conduct and identify operators that adhere to it.

Clearly the safest bet is to go for an established brand name such as Swiftcall, Call Track or World Telecom. The rate of 1p a minute to the US is available 24 hours a day through Calltrack, using local access with their £20 card.

Yet even the shabbiest £5 card that The Observer could find gave a saving on BT's charges, giving 10 minutes local access talk-tine to Japan for just £1.