Mobile phones and unscrupulous telcos are disastrous for young Australians

15 September 2010

The Brotherhood today challenged the big telecommunication companies to stop profiteering from disadvantaged Australians and present clear information about pricing and conditions, offer better customer credit protections and provide decent and reliable customer service. In a submission to the Australian Communications and Media Authority (ACMA), the Brotherhood details a number of unfair practices adopted by telecommunication companies which take advantage of vulnerable people.

‘Mobile phone debt is a leading cause of financial distress and even bankruptcy in young people aged under 25’ said Gerard Brody, Senior Manager, Financial Inclusion. ‘We know that one unmanageable debt to a telco can be listed on a credit report and cast a long shadow over a teenager or their family for their entire lives’

‘And it’s not just younger people. Older people, and those for whom English is not their first language find phone contracts incredibly confusing. Caps, standard and excess rates, data usage – it’s complex enough for the rest of us, and there is no reasonable, simple help for people to get informed about how policies will affect them. Calling a telecommunications company for an explanation or if you have a problem is another obstacle course.

‘If it’s not malicious, it’s certainly bordering on unethical. These companies know that vulnerable customers find their services confusing and end up in bad situations with huge bills – and yet they continue to profit from the problem.’

For low-income consumers and clients of the Brotherhood of St Laurence, access to affordable and appropriate telecommunication services is important for their health, personal safety, wellbeing and connection to their families or welfare workers.

‘We have many clients, some with life-threatening health conditions, who have been cut off from their phones without notifications, and others who have spent days and weeks trying to get solutions to simple problems. For these people, a phone line is an essential life line. Putting their wellbeing at risk in this way is just not good enough.’

The Brotherhood calls on telecommunications companies to address the complexity of phone services and challenges them to:

• Provide timely notifications that the customer is about to exceed their data or call limit and advise that this will incur extra costs
• Implement proactive hardship policies to assist customers who are having difficulty paying their bills and to prevent people having their credit record damaged for small sums
• Establish a standard product information statement which would enable people to easily compare telephone plans and costs
• Provide free customer service telephone lines for all callers including those on mobiles to avoid discriminating against people without a fixed phone line
• Improve training for all customer service staff to enable them to better assist customers whose first language is not English.

For a full copy of the report and a list of recommendations for improved service and fairer pricing go to http://www.bsl.org.au/Research-and-Publications/Publications/Policy-submissions.aspx

Media contact: Amy Stockwell on 0431 738 996 (personal stories available)

Lea’s story – a trap for everyone
Lea, at 18, has two mobile phones. What she was told about free text messages included in her contract turned out to be wrong and she was stung with a bill almost 8 times her cap – plus internet charges that she does not recall ever accruing. It is easy to see how quickly Lea’s situation could descend into debt and disaster.

Marianne’s story – teenagers’ blown-out bills burden their families into the future...
Marianne, an active member of the community, was beset with a bad credit rating after her grandaughter’s mobile phone cap plan saw her rocked by a $1785 bill.  Marianne, who had been a guarantor in her granddaughter’s mobile phone contract, could not get credit to buy essential household items until the Brotherhood helped her get loans under the No Interest Loan Scheme (NILS) for a washing machine, and later car repairs, which she successfully repaid on both occasions.

Ray’s story – the elderly need reliable services for their health and wellbeing...
Ray, one of our 88 year old clients wears a personal medical alarm which became inoperative when his telco cut off his phone mistakenly and without warning. Had he needed help, his alarm would not have worked – and the worst might have happened. When his welfare workers couldn’t contact him, they sent a neighbor to check on him. The home telephone provider was contacted by Ray’s son (who spent 2 hours on the phone) and could not give a reason for why Ray’s phone had been cut off without notification. The service provider admitted that they were at fault and made arrangements to have the home phone switched back on – but said it would take 24 hours. Ray had to leave his home and be cared for by his niece until his phone was connected again – which took three days.