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The Australian Communications Consumer Action Network has called on mobile providers such as Telstra and Vodafone to end the rort in exorbitant excess mobile data charges by introducing reasonable hard caps.

Optus consumer chief executive Kevin Russell lifted the lid on the common practice of taking consumers for a ride, admitting that incremental fee and breakage revenue was a "a drug that you could have relied on".

He told the ABC that "the industry in Australia ... has gone backwards over the last five or six years in terms of how it treats its customers".

Optus revealed publicly for the first time that since September last year it has been waiving domestic excess data charges above $200 and roaming data charges above $500. Effectively, no matter how much they go over their data allowances, customers will never be stung with thousands of dollars in excess charges.

"You can't rely on 15-year-old children going over caps and having $2000 or $3000 data bills," Russell admitted. "That's just wrong. It's wrong morally and it's not sustainable."

ACCAN CEO Teresa Corbin said the consistent message from consumers was that all they want is a hard limit on how much they'll pay. Ms Corbin called on Optus' competitors to follow suit and introduce hard caps.

"If providers are really listening to their customers they'll know that this is the right product to be offering," she said.

ACCAN believes the $200/$500 caps introduced by Optus are still too high. "People choose their plans according to their budget – no one wants to open their bill to find out they've been stung for hundreds of dollars more than they intended to pay," Ms Corbin said.

A new mobile consumer protection code introduced this week in Canada caps extra data charges at $50 and international data roaming charges at $100 a month to prevent bill shock.

Since 2010 the Eurotariff in Europe has introduced a cut-off mechanism once the bill reaches €50 per month. Neelie Kroes, the vice-president of the European Commission, this week called for international roaming charges across the Eurozone to end from Easter 2014.

"Optus says that in any given year about half its customers will break through their caps and incur excess charges, highlights the mass misleading of the public," said Ms Corbin.

“Data usage notifications on their own are not sufficient because they can be delayed by 48 hours. Hard caps are the obvious solution to ensure consumers are protected.”

ENDS

Media contact:  Asher Moses - 0438 008 616 or This email address is being protected from spambots. You need JavaScript enabled to view it.

BACKGROUND

A KPMG report for the Department of Broadband, Communications and the Digital Economy released in June 2008 found that the profile margin made by Australian mobile providers on global roaming calls was 300% higher than the margins they make domestically. http://www.dbcde.gov.au/__data/assets/pdf_file/0005/86369/KPMG_Report_of_findings_on_International_Mobile_roaming_charges.pdf)

According to the Telecommunications Industry Ombudsman mobile roaming complaints involving disputed amounts below $500 have decreased from 41.8% in quarter 1 of 2011-12 to 25.9% in quarter 1 of 2012-13.

In contrast, mobile roaming complaints involving disputed amounts in the $1,000 to $5,000 range have increased from 32.2% in quarter 1 of 2011-12 to 41.8% in quarter 1 of 2012-13. Disputed amounts in the $5,000 to $10,000 range and in the range above $10,000 have doubled over this timeframe.

Complaints to the TIO about mobile roaming charges of more than $1000 now account for over half of all mobile roaming complaints, up from 36.9% in quarter 1 of 2011-12. Complaints to the TIO about mobile roaming involved around $8.0 million in disputed charges over the past five quarters, averaging $1.6 million each quarter. The TIO has seen a 21.9% increase in the total value of amounts disputed in quarter 1 of 2012-13 when compared to the previous quarter, even though there has been a 6.4% decrease in the number of mobile roaming complaints over this timeframe. (Source: http://www.tio.com.au/__data/assets/pdf_file/0014/131135/2013-02-05_Draft-IMR-Standard_ACMA.pdf)

New Canada mobile consumer protection code - http://www.cbc.ca/news/business/story/2013/06/03/business-crtc-wireless.html

ACCAN tip sheets:

How to avoid smartphone bill shock - http://accan.org.au/index.php?option=com_content&view=article&id=67:smart-phones-avoiding-high-bills-downloading-data-on-your-mobile&catid=89:phones&Itemid=173

Travelling overseas with a mobile phone - http://accan.org.au/index.php?option=com_content&view=article&id=235:dont-let-global-roaming-ruin-your-holiday&catid=89:phones&Itemid=173