Kogan Mobile Update

25 March 2013

As we looked at in an earlier post, new prepaid offering Kogan Mobile has been heavily criticised over the past week. The telco has reportedly been refusing to renew service to customers who have used too much of what has been advertised as an ‘unlimited' voice calls and text message allowance. As a reaction to the backlash, it appears that Kogan has made a few updates to its website.

The first noticeable change is that the company has fallen in line with the ACMA’s compliance standards by adding a two-page Critical Information Summary to its online plan information. As we posted last week, its previous summary was a couple of lines discussing pricing and a few links to the Kogan Mobile Members Area, which fell way short of the instructions outlined in the new TCP Code for telecommunications providers.

Although the lack of a Critical Information Summary was a glaring omission for anyone who's familiar with the new ACMA requirements, the real issue for customers was the lack of clarification in Kogan Mobile's terms and conditions of how many phone calls and texts are too many, when the plan is meant to offer unlimited value. Angry customers were unimpressed that they had been denied renewal of their prepaid service, without any warning or indication that they were somehow abusing the supposedly 'unlimited' allowance that Kogan plans offer. And other consumers were questioning how using 6GB of data when you had, in fact, paid for 6GB of data was somehow in violation of Kogan's fair use policy.

In response, Kogan Mobile has added a revised Acceptable Use Policy for its Access 30, 90, 365 and Access Data plans. According to these new terms, Kogan Mobile can suspend, cancel or refuse to renew service if a customer:

  • Uses the service for commercial purposes.
  • Uses the service as a permanent connection.
  • Downloads or uploads more than 400MB of data in a single day, on three or more days in a 30 day period.
  • Downloads or uploads more than 1GB of data on a single day.

The most interesting (and by interesting, we mean confusing) condition is the following, which we've quoted verbatim from Kogan Mobile’s website. It states that service may be cancelled if a consumer uses their plan:

“…in a manner where your volume of calls or texts within a single 30 day period exceeds the volume of calls or texts made by 99% of users of the same type of Service within that same 30 day period, as reasonably determined by Kogan.”

Kogan Mobile

This wording only gives users a very vague idea of what kind of use would be considered unacceptable - 'more than what 99% of customers are using' doesn't clarify anything. According to these terms, that means that 1% of Kogan Mobile customers (so approximately 1000 people currently) will be exceeding reasonable use every 30 days, assuming everyone is subject to the same 30 day cycle. Presumably, this 1% will be given marching orders at the end of the month. And what if 99% of customers aren't using the same amount of talk and text? Kogan Mobile plans seem to attract heavy users, so the amount of 'excessive' users could be higher. We could be reading it in a harsher context than intended, but at the very least, it's an ambiguous and unhelpful paragraph that does nothing to indicate to Kogan customers what will be considered excessive usage - and that's the problem.

Unfortunately there's no usage alert system or method of warning customers that they have used 'too much' talk or text, so it's virtually impossible for consumers to know when they are reaching dangerous levels of use - especially when Kogan aren't providing a value in minutes used, or texts sent, for customers to measure their use against. So far, we've heard no reports of Kogan Mobile explaining to disconnected customers how much use is considered unreasonable, or giving users a chance to appeal - it's simply an immediate refusal to allow customers to recharge.

Aside from the problem of limiting voice calls and SMS that's advertised as being 'unlimited', the restrictions on data use are sure to upset Kogan Mobile customers, particularly as the telco's generous 6GB data inclusions were what drew many heavy users to Kogan plans in the first place. Even customers who attempt to monitor their downloads and uploads through Kogan's website, or data usage apps, may find that figures aren't updated in real time, causing them to mistakenly exceed the 400MB or 1GB per-day restrictions.

While we can't weigh in on how this approach fits with what's expected of Kogan Mobile under Australian consumer law, it still comes across as an incredibly vague way of getting around consumer complaints of misleading advertising and unfair terms and conditions.


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