TCP code usage warnings won't stop bill shock: WhistleOut

Carriers should let consumers place a "hard stop" to service when limits are reached, says Cameron Craig.

Bill shock will perpetuate even with SMS usage warnings required by the revised Telecommunications Consumer Protection (TCP) code, said WhistleOut director, Cameron Craig. Carriers should instead let customer opt for a “hard stop” on their phone accounts when they reach limits, he said.

The revised TCP code begins a phased-in approach 1 September and is to be enforced by the Australian Communications and Media Authority (ACMA). The code aims to protect customers from unexpected charges, sort out confusing mobile plans and improve handling of customer complaints. Carriers have said they’re already working toward improvements.

The code is “a welcome change,” but Craig expects bill shock to continue at major carriers because “the new ACMA code does not address the so called 'confuseopoly' of mobile call costs inside and outside of the plan value, as included value amounts are still advertised in dollars.”

“A consumer with a mobile plan paying $40 per month for $400 with calls at 99c per minute has about 340 minutes worth of calls including 35c flag-fall charges,” Craig said. “Under the new code, the unit price is '$2.33' per 2 minute call and is published upfront.”

“However, with a busy month where the customer keeps using their phone and ends up using their phone twice as much, the bill is not doubled to $80, it will be almost 10 times higher at $436.”

The code attempts to provide customers warnings when they have used 50, 70 and 100 per cent of their minutes, SMS or data allotments. But that may not be enough to prevent customers from going over, Craig said.

“The weakness in the new code is that even with an SMS alert to the customer that they are at 85 [per cent] and 100 [per cent] of included value, the customer can keep pulling the trigger and still not understand how high their bill will be as usage costs are not accumulated at the same rate as in inside the plan.”

Instead of warnings, “telcos should provide consumers with the option to place a hard / fixed limit on their accounts which would de-activate service at their own pre-selected monthly spend,” Craig said. “This is similar to a credit limit on a credit card which de-activates the card when a limit has been reached.”

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The telcos have moved into the insurance business where it is much easier to make a profit than by providing better network services.
A new user estimates his (or her) monthly usage and signs up for an appropriate plan. Careful usage for the first month results in no bill shock, but usage explodes in a later month due to some unforeseen event (car accident, family illness, partner problems, whatever) and usage goes over the cap. At $1 a minute it's easy to accumulate a massive bill. The user then renegotiates and goes onto a higher plan - one on which s/he will probably never reach the limit each month, but at least s/he ensures there is no bill shock again.
So the telco is not just selling network usage, it's selling insurance. The user is insuring against the possibility of having a heavy use month.
You can still get some phone plans which only charge 10c per minute, but you have to look very hard for them.
It's such a great rort I am waiting for electricity retailers to start selling electricity the same way.



I gotta say, this Cameron Craig is an idiot. He's just said that people don't stop using their phone because they don't know what the charges are beyond the 'cap', and then he says people should be given the option to be blocked once they reach the cap? Hi Cameron, quick question for you, if they don't understand the reason to opt-in to being cut off, why in the name of sweet jesus would they do it?

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