Unexpected Mobile Charges May Be Costing Consumers Millions

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A new survey, commissioned by the Australian Communications Consumer Action Network (ACCAN), has revealed that 12 per cent of respondents experienced unexpected third party charges on their mobile phone bills in the last six months.

“Applied to the mobile customer base of Telstra, Optus and Vodafone, this 12 per cent equates to almost 1.9m people who could have received unexpected charges on their mobile bills. We estimate that collectively, consumers may have been charged as much as $20m unexpectedly in the last six months*,”said ACCAN Director of Policy, Una Lawrence. “ACCAN is calling for better protections to be put in place so that consumers don’t get caught out with unexpected charges on their mobile bills.”

The ACCAN survey found people are buying apps, games, entering competitions, getting news updates and voting on TV shows and charging it to their mobile accounts. While this may suit some consumers, just under 50 per cent of respondents were unaware their phone could be used this way. Over a third who had incurred unexpected charges reported that they weren’t informed, didn’t consent to or confirm the charge, or understand how or how much they would be charged.

“This significant lack of awareness indicates that there should be stronger consumer protections, such as default barring of third party charging, and better consumer information. If people want to charge items to their phone bill they should have to actively change their settings with their telco. Otherwise their phone is like an unsecured credit card, and people have no idea what they’re being charged for,” said Ms Lawrence.

Survey respondents supported stronger safeguards, particularly those who had experienced unexpected charges. Preferred options for this group were default barring (40 per cent) to be lifted on request of the account holder, followed by support for confirmatory text acceptance for each purchase (20 per cent).

A contributing factor to the lack of awareness of third party charges is the finding that over half of respondents are paying for multiple mobile services. This means the people who subscribe to the services may not be the bill payer – for example, families with children, and business account holders with multiple mobile phone services.

“Additionally, the survey provides concerning evidence that the existing safeguard of replying ‘STOP’ to SMS notifications to opt out isn’t working properly. Almost three quarters of people who replied ‘STOP’, still found the charge added to their bill,” said Ms Lawrence.

What can consumers do?

  • If you find third party charges on your phone bill make a complaint to the third party company. If you can’t contact the company, take your complaint to your telco. Ask your telco to bar these services on your account. If your complaint is not resolved with your telco, take your complaint to the TIO.
  • The Mobile Premium Services Code that controls some third party charges is out for public comment. Have your say about third party charges and the need for better consumer protections by making a submission before July 27.
  • Share your experiences with third party charges with ACCAN on Facebook or in the comments section on the blog post.
  • Contact the ACMA to express your concerns about third party charges and the need for better consumer protections. The ACMA has information on its website about unexpected third party charges.

For more information, contact Luke Sutton on luke.sutton@accan.org.au or 0409 966 931. For the latest updates, follow ACCAN on Twitter or like ACCAN on Facebook.