Here’s a Gizmodo Pro-tip: If you own a smartphone that’s capable of accessing the internet, make sure you’ve got a data plan as well. Otherwise you’ll end up like South Australian MP Russell Wortley who ended up with a $10,500 bill from Telstra after his son downloaded a couple of footy games to his iPhone over NextG.
Because his iPhone didn’t have a data plan on Telstra, the MP was charged at the going rate of $2 per MB for the data used. Apparently over the course of an hour and a bit Wortley’s son racked up $4000 worth of data charges, and $3000 on another occasion.
It’s kind of hard to understand how a supposedly free footy game can suck down 2GB worth of data in an hour – that’s a lot of data for a game – but if nothing else, this case might help Australia catch up to Europe and the U.S. when it comes to killing off the whole concept of “Bill Shock”
Ed’s note: I’ve been meaning to write this story up for a couple of days, but wasn’t able to get to it. But it sort of became a priority after I was talking about it with the guys on the 7pm Project last night, the clip of which you can watch below (it starts at about the 8:30 mark)
[Adelaide Now - Thanks Hamish!]
Got a clue
Wednesday, May 12, 2010 at 12:51 PMIt is annoying to see phone companies cop flack over consumer stupidity. You do not need to be a technophile to understand a phone contract. A 13 yr old should be on a prepaid phone anyway. Bad parenting and ignorance prevailing here.
matt
Wednesday, May 12, 2010 at 1:24 PMas if! normally I’d agree, but REALLY? you think it is in anyway reasonable to charge someone $10,000 just for a month of mobile usage????
F that!
the telcos should be more clear about this sort of thing. even my prepaid dumb phone came loaded with a dodgy data plan that charges like $1 for 100KB and the interface of the phone is specifically set up so that you accidentally fire up the data using internet thing at every turn (for instance, the button to hang up a call turns into the button to start up the internet when the call ends. they hang up just before you? you’ll fire up the internet by accident every time!!!) I had to manually go into the phones settings and delete any reference to a stupid data plan!! I never asked for it!
yes, in general people should learn to RTFM, but in THIS case, the telcos ARE DOING WRONG, and it should be investigated by the ACCC like it is in the U.S!
as Nick said, if people are experiencing massive bill shock every single day, then its highly likely that the billers are doing it wrong! they are not helping people understand their contracts, if anything it seems they are happy to promote bill shock!
H
Wednesday, May 12, 2010 at 1:37 PMIf you’ve ever met an MP or their children in particular you’ll understand that they don’t pay for anything, mobiles, landlines, internet, it’s all paid for by the government, so they generally like to utilise it for all it’s worth, it’s the parlimentarians way. When I was in my teens I was dating a daughter of a NSW MP, she’d call my mobile from her dads mobile, once for over 4 hours (wow, what a waste of time), so you can imagine that would rack up a decent bill. She was caught eventually by her father and not allowed to use the phone any more, but she called me countless times for over an hour each time. Hope tax payers think my failed relationship was worth it ;) haha
Nick Broughall
Wednesday, May 12, 2010 at 1:39 PMI’m sorry, but there is no justification whatsover for the telcos to be charging $2 per MB for data if you don’t have a plan. Yes, the consumer should always pay attention to what their plan entails and how much data they use, but there should definitely be a limit to the amount somebody should get charged for using data. or better yet – stick a gate in there that tells people when they’re about to use data at an exorbitant rate.
As it stands, the telcos are making a mint off consumer ignorance (or even more accurately, consumer confusion), and they shouldn’t be allowed to. Seriously, have you tried to work out the data rates these telcos offer? I tried to look into it yesterday, and it was a minefield of confusion.
H
Wednesday, May 12, 2010 at 1:52 PMDam right Nick. Telstra a well behind the times!
Nick Broughall
Wednesday, May 12, 2010 at 2:29 PMIt’s not just Telstra. Vodafone will charge you up to $5 per MB if you’re on a post paid plan and you use data without a plan. It’s an outrage.
Adam
Wednesday, May 12, 2010 at 2:15 PMTelstra DO sens SMS’s when you use a lot of data. my wife gets one every time she goes over $25 worth of data. if in todays day and age, with all the ways of checking things, people still get burned, it is their own fault.
signing the contract is the customer agreeing that they understand what they have agreed to. no one forced them to sign the contract, or refuse to get a data plan (as all staff try and sell data plans as they are paid commissions for them). if you don’t want to pay for it, don’t use it.. it is like the toll roads.. if you dont want to pay, don’t drive on the road..
if i went back and forth on all the tolls, every day, twice a day, i’m sure i would have to pay for every trip..
Nick Broughall
Wednesday, May 12, 2010 at 2:33 PMTelstra send SMS messages, sure. Optus don’t. 3 doesn’t (at least on my mobile broadband plan).
But the simple fact is that if you organise to pay for X amount of data (or have X amount of data in your plan) you should either have the option of telling the telco to cut you off when you reach that amount, or have them contact you and offer you more data at a reasonable rate.
And your toll analogy is flawed – tolls are a fixed price, you know how much you’ll pay when you drive them. Nobody knows how much data they’re going to use when they log on to Facebook to check some photos.
Adam
Wednesday, May 12, 2010 at 2:43 PMNot sure if you are in Melbourne Nick, but we don’t have the cash toll points. there is no way of knowing how much you are being charged, or what other “invoicing” charges you will get.
Often the billing systems were not designed to support “gates” and alike. this is why credit card companies do it manually.
How is this different from the old days when people would make STD calls without a good plan and get charged a lot then complain?
you use it, you pay for it.
Lastly, if you don’t understand how to track you usage, or the difference between kb, kB, Mb, MB, etc then you shouldnt be using a phone for internet.
next time someone OD’s on drugs, i’ll blame the dealer for not explaining how to specifically use the product to ensure no adverse effects on the specific user..
Nick Broughall
Wednesday, May 12, 2010 at 3:03 PMI’m Sydney based, but we have the same types of toll roads here. The thing is that the rate is fixed – Even if you drive the entire motorway, you’ll only get charged a fixed amount.
If the billing systems aren’t setup to support gates, then they should change This is 2010, after all, and mobile data (and bill shock) isn’t exactly new anymore.
But your response: “Lastly, if you don’t understand how to track you usage, or the difference between kb, kB, Mb, MB, etc then you shouldnt be using a phone for internet” is quite offensive. Not everyone is technologically savvy – in fact, most people aren’t. What you’re saying is that mobile internet should only be available to tech-savvy people. You might as well say that people who don’t understand the difference between http and ftp should all be made to live in camps.
Finally, next time someone overdoses on drugs, fuck oath you blame the dealer. If they’re profiting from distributing illegal substances they deserve to be held accountable for the suffering of those they sold them to.
Adam
Wednesday, May 12, 2010 at 3:13 PMPeople ARE accountable for their own actions, NOT the enablers.
people SIGN A CONTRACT agreeing that they understand things, how can they claim that they were unaware?
what everyone fails to understand is that this is a 1 in a million case.. with some rounding of figures..
“you’ll only get charged a fixed amount” no, you get charged at every toll point, at varing amounts depending on the toll point. how is that different to being charged every time you load a page, differing depending on the page?
it is all still dollars per unit.. people just don’t understand how to measure the unit.
Nick Broughall
Wednesday, May 12, 2010 at 3:38 PMOf course people are accountable for their own actions. But the system is broken. NOBODY should have to open up their bill at the end of the month and see that they’ve been slugged with thousands of dollars worth of charges because they watched a couple of YouTube videos and didn’t realise they didn’t have the right data plan.
Signing a contract may legally mean that a customer has said that they understand the conditions of the arrangement, but the reality is that if someone just wants a phone and doesn’t realise they want data, they’re not going to understand that clause in the contract.
The simple fact is that the Telcos are not doing enough to try and stop this from happening. They just sit back and charge exorbitant amounts to unwitting customers, and they shouldn’t. End of story.
(Finally, not sure how Melbourne tolls work, but the M7 in Sydney you get charged depending how far along the road you drive. So if you drive the whole thing, you’re charged a fixed amount. If you drive less, you get charged less. But the amount you’re charged for driving on the road is capped at that price from driving from one end to the other).
Adam
Wednesday, May 12, 2010 at 3:44 PM“The simple fact is that the Telcos are not doing enough to try and stop this from happening”
Telstra Shop @ Knox City makes you sign another document that states that you refused to take a data pack. How is this not enough..
“but the reality is that if someone just wants a phone and doesn’t realise they want data, they’re not going to understand that clause in the contract.”
So the problem is customers signing things without reading them or understanding them.
And if you think that saying “End of story” means that you can stop me from having opions, then you will jsut have to block this from being posted.
Nick Broughall
Wednesday, May 12, 2010 at 3:58 PMTelstra is not the only Telco.
The Knox City Telstra Shop may make you sign a document saying you refused a data pack, but do they offer you the option of not being able to access data? Some phones have that feature built in, but others don’t. It would not be hard for any Telco to stop SIm cards accessing data, or redirecting them to a page that informs customers “if they want to access data, they need a data pack and to contact this number to activate.”
The Telcos need to be doing more to stop this from happening. You can place the blame at the foot of the consumer, but that doesn’t mean the company is devoid of responsibility.
And Adam, I’m glad you have strong opinions about this and that you’re taking the time to share them here in Giz. It’s kept my afternoon interesting :)
matt
Wednesday, May 12, 2010 at 5:49 PMthey shouldn’t include every random feature under the sun and then make you sift through paper work and processes to get rid of the expensive crap you don’t want! it should be OPT IN! not OPT OUT!!! its the biggest crime in the world! same with the Banks and their overdraft fees! it should be OPT IN that a bank will approve all transactions and charge you a fee if you go over! by DEFAULT they should just block transactions!!! it is clear that they are just mining for as much money as possible!!
if I contracted Jim’s Mowing to cut my grass and then came home to find they had built me a tree house, and dug a moat around my property and then demanded that I pay them $20k for it because they had just tacked on every random service they provide to the bottom of the contract, I wouldn’t be impressed!
as for the tolls! yes! they should have big neon signs saying THE TOLL IS THIS MUCH!! people should BE TOLD how much they have to pay for stuff! and what they are paying for! they shouldn’t have to go looking!
it should be a company’s GOAL to make sure everyone knows all the fees involved, obviously this is completely counter to their actual goal of making as much money as possible! so someone else has to step in and make sure they are doing it! the IMF has just today announced that they are funding a class action lawsuit on unfair bank fees, and I dare say the telcos won’t be too far behind.
pan.sapiens
Wednesday, May 12, 2010 at 6:05 PMWell I pay 1.5c/mb. If someone is dumb enough to sign up for $2/mb, well, I guess there’s a sucker born every minute.
Travis
Wednesday, May 12, 2010 at 1:11 PMTelstra has introduced on their new “Telstra Business Broadband” plans a excess cap of $400. Hopefully they’ll introduce this to the mobiles side of things as far as data is concerned. so basically it works as a basic example. Plan:$40 = 5GB excess is 0.08c up to $400. So no matter how much extra you use you will only get charged $40 + $400 = $440
Jay
Wednesday, May 12, 2010 at 1:37 PMBroadband has shaping, on the mobile, why do they not just disconnect after reaching a certain limit, where the subscriber then volunteers to go ahead at the HIGH rate$ charged.
Lastly, with the NBN, why can the Mobile operators not provide a FREE broadband network for all? Why charge $illy amount$ to $ub$criber$??
Your Mate Alex
Wednesday, May 12, 2010 at 1:48 PMI think the default for all plans should be to cut off your data when you reach your data cap and when you sign up, one of the questions should ask you if you require excess data. It’s crazy that it’s not even an option.
Tristan
Wednesday, May 12, 2010 at 2:09 PMOkay, this is VERY close to my heart at the moment. Have just had a charge of $40,000 for excess data usage from one of the telco’s. The bill is for tethering from 1 person for 6GB worth of data. Apparently 1 check box was missed when signing the contracts, which means they can do this. Now I am currently looking through emails like mad trying to find somewhere where my account manager said they agreed to this. I verbally spoke to them and they said yes, but now they are backflipping saying that they never knew this was possible. Sorry for the scarce details, but I am currently trying to resolve this amicably and don’t want to jepordise this. There is NO WAY a telco should be able to charge this without contacting the user saying “Are you sure?” – Credit Card companies do this when they see weird behaviour… why can’t telco’s do it?
Andrew Craick
Wednesday, May 12, 2010 at 2:18 PMThe government should just mandate by law that all data and subscription services (phone, mobile or Internet) should stopped or be shaped if they go over a set limit ($100) rather let Telco’s prey on peoples ignorance and rip people off with massive bills.
Simple. Why dont we learn anything from history. This has happened on home fixed voice, on mobile phone voice, it happened on broadband at home on either ADSL or cable, its happened on mobile SMS premium services and will continue to happen on peoples ipad etc untill the government does something to protect ignorant consumers from the Telcos.
Look at the credit card industry. They are liable for costs involved in the misuse of of their cards and look at the effort they go to cancel your card or get in contact with you if they see suscpicious activity on your card. I’ve had calls while traveling overseas who query whether i’d just purchased expensive jewelry on my credit card (which i had) because they wanted to shut down the account to stem their losses.
Make the Telco responsible for excess charges if the customer hasn’t specifically agreed to them or enabled them and see how quickly this problems goes away. Its not like the technology isn’t out there but the teclo’s aren’t going to enable it unlesss they’re forced too.
SteveM
Wednesday, May 12, 2010 at 3:39 PMWhat’s wrong with a dynamic data plans for everyone who doesn’t HAVE a plan? Like if you use our data without having a contract, we’ll charge you what we’d charge someone on contract plus 10%. E.g. I use 125MB this month. Instead of charging per MB, charge me what it would cost to get that data on a monthly contract for one month PLUS 10% (for administration costs on the telco’s end). Everyone’s happy.
Nick Broughall
Wednesday, May 12, 2010 at 3:40 PMThat sounds totally reasonable.
Nato
Wednesday, May 12, 2010 at 3:45 PMFinally it happened to a politician, now something might be done about it. I hope.
Tom
Wednesday, May 12, 2010 at 4:28 PMI saw you on TV. You looked pretty.
Mordd
Wednesday, May 12, 2010 at 4:38 PMNot often you see Gizmodo scoop ITNews.com.au on an article like this but well done guys, you did in this case.
StevoTheDevo
Wednesday, May 12, 2010 at 5:04 PMThe telcos do have a responsibility to make sure the charges are not excessive, this has been raised before but I have no link for it.
Clearly they are failing in this responsibility.
Yes, the consumer needs to be more aware, but the telcos can assist greatly with minimal effort on their part.
Not Kidding
Wednesday, May 12, 2010 at 5:28 PMIf anyone thinks Telstra is ripping people off for domestic 3G data, you’ve seen nothing until you’ve seen a bill for 3G data when roaming overseas. Once you leave the country, forget about your data plan. They charge $15 per MB for roaming data. I work for a large company and the big T is our supplier for these services. I’ve seen bills of over $16,000 a month that included about 9 or 10 days use whilst overseas. Telstra’s excuse is that the $15 per MB is an average of all the charges they get from overseas carriers. Give me a break!
Tim
Wednesday, May 12, 2010 at 6:36 PMAdam,
You do make some valid points and strictly speaking they are logical. However, can you really hold the opinion that it is fair and just to allow someone to accumulate a bill in the thousands of dollars?
Surely there is an ethical responsibility to help people understand what they are doing, particularly in a one off case. If someone was doing this every month and trying to take advantage of the system then sure, hit them with all the charges they’ve accumulated.
However if you have someone who has signed up for a contract at some dodgy re-seller and they haven’t been explained how data costs can work then they are in a very vulnerable position.
Also, resellers who use Telstra’s voice signature sign up process are not at any stage informed about data costs, unless the sales rep discusses it with them. In this case, there is no contract to sign, and therefore no documentation explaining how they will pay for data without having a data pack.
At the end of the day, everyone is just trying to make the simple point that telcos should recognise irregular use and warn people of high usage. It is unethical to do anything otherwise.
Justme
Thursday, May 13, 2010 at 12:35 AMiPhone+Telstra is asking for trouble. I reverted to prepaid and browseplus packs and have had 2 separate occasions where my wifi at home wasn’t working and the phone was updating my apps. In the morning I find my phone with several alerts and no credit left. On one other occasion I could fond no explanation. Telstra took $30 and my phone showed no activity over the time my credit disappeared. 2 hours on the phone to Telstra and I find out they can’t actually find records of which sites I supposedly visited so they refunded. Now I find I can’t disable the data apn to prevent this. Enter unlockit.co.nz ( I am just a happy user; that’s all- I have no idea who they are) who enable me to set a false apn, restoring the control over my data access that Telstra took away. Now I know when the phone tries to connect as it tells me “the cellular data network is not available” I just remove the invalid profile when I want 3g data and reinstall the fake profile when I’m done; no more shock bills. ( iPhone os 4 will make this even easier)
Danny
Thursday, May 13, 2010 at 10:19 AMJust like I’d never get a broadband connection that charged excess rather than shaping when the limit was exceeded, I would never get a phone plan that didn’t have a charge limit. Guess that’s why I use prepaid.
Every phone contract should have a monthly charge limit, preferably user-specified, and it should be illegal for telcos to make a contract without a clearly specified monthly charge limit.
johnd
Thursday, May 13, 2010 at 12:49 PMI think people are missing the point. If it costs $20 for 300meg on a plan, why should it cost hundreds of times more for the same amount of data without a plan? Does it cost more to push the “unplanned” data to your phone?