01.Bills that bite
Mobile service providers are supposed to be making bill shock a thing of the past, but weak regulatory intervention has allowed plenty of lingering aftershocks.
We take a look at why excessive phone bills continue to top the list of consumer complaints in Australia and how the service providers continue to get away with it.
Despite a stern warning to
the telcos by the Australian Communications and Media Authority (ACMA)
in September last year, massive phone
bills and international roaming that
costs as much as a night in a New
York hotel continue to top the list
of consumer complaints about
mobile phone providers.
ACMA found in its
Reconnecting the Customer report last
year that inadequate billing information
and weak spend management systems
were the main causes of high bills.
The finding didn’t surprise the
Australian Communications ConsumerAction Network (ACCAN), which says
mobile phone providers continue to sell
limitless credit accounts to consumers without
see a mobile phone
contract as personal
finance, much like a
credit card,” says ACCAN
spokesperson Elise Davidson.
“The banks would be in enormous
strife with regulators if they were
simply able to issue credit cards with
no limits, which is essentially what
mobile plans are.”
For more information about mobile phones, see phones and mobile devices.
In its 2011 report on the sector last year, ACMA said companies should introduce spend management tools that go beyond online monitoring systems and challenged the industry to make voluntary changes or risk new regulations.
Until quite recently, the Telecommunications Consumer Protection Code, which serves as an industry guideline, did not call for an effective way to monitor the charges that accumulate during a billing period.
The revised code, introduced in February now includes standardised requirements for spend management tools, but Davidson is sceptical about the changes.
"All the Communications Alliance has done is tinker around the edges. Unfortunately we don't see the big ticket reforms to spend management that we believe are needed to put power back in the hands of consumers."
"ACCAN cannot support the revised TCP Code because we don’t believe it provides adequate consumer protection" she says.
Both Optus and Telstra now send SMS alerts to customers before they reach their monthly limit. Smaller carriers however, including Vodafone and Virgin, still require customers to sign up to receive balance alerts.
The Code fails to provide real-time usage notifications for customers and has no transitional measures in place so customers to adequately track their spending.
In a report issued six months ago, the telco regulator laid out the following recommendations for mobile phone providers designed to minimise customers’ bill shock:
- An SMS or email notification to alert you at a specific usage point, as well as a second alert when you reach 95% of your monthly allowance.
- Access to more information from your salesperson about usage limits, including the consequences of any contract limitations or exclusions, before entering into a contract.
- A transition plan until the formal alerts system is introduced.
Since publication, Vodafone have introduced an automatic alert that customers will receieve when they arrive in another country. The SMS will advise of the international rate specific to the country they are visiting as well as details of data roaming rates. Further to this, Vodafone customers will receive an SMS on their return to Australia reminding them to cancel any data roaming packages that are no longer needed.