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.”

Follow Adam Bender on Twitter: @WatchAdam

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