Better Than ACMA's Bill Shock Fix
Summary: You may have heard about the new Australian reforms to the Telecommunications Consumer Protections Code (TCP), which were introduced at the start of September to crack down on the telcos and reduce...
You may have heard about the new Australian reforms to the Telecommunications Consumer Protections Code (TCP), which were introduced at the start of September to crack down on the telcos and reduce bill shock. Basically, the new code aims to overhaul phone providers in terms of their advertising, the information they provide customers, their customer service and the steps they take to assist consumers to avoid surprise charges – we’ve put together a comprehensive guide here. While tagged as the ‘cure’ for bill shock, we found that although the new requirements will help customers stay within monthly limits and pick a plan that’s more suited to their individual needs, it’s far from the bill shock remedy the Australian Communications and Media Authority (ACMA) has been promoting it as.
In contrast, Vodafone New Zealand has this year implemented its own cure for bill shock caused by customers going over their data limits. Called Data Angel, it’s a free service the company provides to customers under its business and personal Smart plans, and it’s a similar system to the TCP’s notification requirements, although much more effective.
Here’s how it works:
1. When a customer uses 80% of their data, a text is automatically sent notifying them.
2. A second text will be sent when a customer reaches 100% and their data session will be stopped.
3. The customer will be directed to a mobile webpage where they can choose to:
- Buy a one-off 500MB data add-on
- Continue browsing at the casual rate until the end of their billing cycle
- Block themselves from using any more data, and their usage will cease until the next billing cycle. They will still be able to use WiFi to browse and download.
Vodafone also gives its customers the option of adding on an extra 1GB per month at any time. Both the 500MB and 1GB add-ons will expire at the end of the billing cycle.
Vodafone NZ is the first company in the Vodafone group to offer the service, with the hope that it will encourage confidence in customers who were previously nervous about smartphones due to the worry of unexpected data charges. The only catch is that the Data Angel system can’t be turned off or opted out of, which has resulted in complaints from some customers who are happy to go over the allowance and dislike being interrupted and cut-off midway through their data session.
Minor criticisms aside, the idea has generally been embraced by in New Zealand by customers who are happy to be informed immediately when they’ve reached their limit and appreciate the option of blocking their access to data if they don’t want to spend any more that month. Although there is currently no Vodafone NZ system to notify customers of their talk and text usage, the company are working on a version to cover data usage overseas, in order to combat bill shock from international roaming charges.
Despite being massively talked up by both the ACMA and Communications Minister Stephen Conroy, the new usage notification requirements the TCP is introducing in Australia don’t offer quite the same amount of protection and effectiveness for consumers. Under the new code, Australian providers must inform their customers via a text notification when they have reached 50%, 85% and 100% of their monthly data, voice and text usage. They’ll also need to alert customers when sending the 100% notification (either in the same text or separately) the charges which will apply for any further usage past the monthly allowance. The spend management alerts won’t be mandatory for providers until September 2013, but Optus has already launched its service a year ahead of schedule. Optus are reportedly also planning to offer customers additional top ups by SMS when they have exceeded their limits, providing separate add-ons for voice and text and data value.
The downside of this system is that these alerts will not be sent to customers in real-time; it may take up to 48 hours for a notification to be sent, and the usage alerts don’t apply to calls and texts to overseas or any usage outside Australia. So there’s still plenty of room for customers to unknowingly exceed their included usage, and not be informed until two days after they've passed their limit.
While we agree that the new Australian usage alerts are better than no alerts all, what would really benefit consumers is telcos implementing schemes similar to Vodafone NZ that actually offer this information in real-time, and giving them the choice of cutting off their usage altogether until the next billing cycle. So far, providers aren’t giving their customers this fixed limit option, and it’s all too easy for users to overspend and not realise.
The ACMA's reasoning behind not imposing accurate and up-to-date usage notification requirements as part of the TCP is that existing billing systems are supposedly 'limited', and resellers would encounter difficulty when trying to receive real-time usage information from wholesalers. Smaller suppliers would realistically not be able to meet these obligations and be forced out, therefore limiting competition within the industry. However, the ACMA has acknowledged that the small companies are likely to struggle with a lot of the requirements and there will be some that won't be able to continue, so we can assume that keeping the lesser providers in business is not a priority for the Authority. If the TCP revisions were designed to put the consumer's interests before those of the telecommunications industry, they would enforce stricter rules for mandatory spend notification tools, and give customers the option to put complete cut-offs in place when they use up their plan allowance.
Until something similar to Data Angel is introduced here, it’s up to consumers to keep on an eye on their own usage in order to avoid unexpected charges at the end of the month. However, surveys have shown that only around a quarter of customers who experience bill shock are aware of the spend management tools their carriers make available to them. Most of the major providers offer their customers tools to manage and monitor their spending and usage, through smartphone applications free to download or by logging in to their account information on the company’s website.
Applications available from the major carriers:
Hopefully if the New Zealand model is successful, Vodafone will introduce an equivalent to its Data Angel plan here and prompt rival telcos to develop similar tools. Annually it costs about $113 million for carriers to write off bad debts, and the cost of telephone complaints (to both consumers and companies, and to the Telecommunications Industry Ombudsman) is around $108 million. The perceptions Australians have of their telecommunications providers are dismal; greater choice between companies and plans hasn't translated into greater value for consumers, and the confusing pricing and advertising that often leads to bill shock has given telcos a reputation for being unethical.
Considering the criticism and unwanted media attention that is generated by high mobile phone bills, and the cost to both the industry and customers, reducing the incidence of bill shock really should be a bigger priority for Australian providers. If telcos themselves won't offer a viable solution, the ACMA needs to be given the power to take real steps to ensure the industry tackles the bill shock problem, instead of providing empty recommendations that may not be adequately enforced.
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