The consumer rights magazine says BT may be in breach of its licence by telling customers, erroneously, that cable operators charge for engaged calls and directory listings and that calls made through BT are as cheap as those through cable companies.
The report was based on 23 inquiries by researchers at Which? The conclusions are part of a complaint now with Oftel, the telcoms regulator.
"Our disturbing findings reveal that BT could be flouting its licence and perhaps breaking competition laws too," Andrew McIllwraith, senior editor of Which?, said.
Oftel said yesterday: "We will investigate it. These are serious matters, and resources will be made available to come to a conclusion as soon as possible."
BT rejected the report. "We deal with 3 million such inquiries every working day, and the Consumers Association is talking about just 23. More than 10,000 people are engaged in doing just this work."
The spokesman added that "if mistakes were made they were genuine. We do not set out to deliberately mislead." The allegations come at sensitive time for BT, which this week must decide whether to accept Oftel's proposals for new competition powers in return for a relaxation of price controls.