Watchdog warns on telco tricks and iPhone fees

The ACCC has suggested that iPhone buyers take a closer look at the data allowance on their plans, and also written to carriers regarding concerns over what it calls “the potential for consumers to be misled about mobile data usage charges.”

The move has been triggered by anxiety over relatively low monthly download limits and high excess usage charges, as well as an inability for consumers to accurately gauge their true data needs.

This has been underscored by the insanity of Telstra’s entry-level iPhone plans, which come with a meagre 5MB of data – sufficient for browsing less than a half-dozen Web pages or watching a ten minutes of video on YouTube. Once over that limit, customers are slugged an excess data charge of $1/MB.

It’s an identical play to Telstra’s mass marketing of BigPond broadband – a low up-front fee coupled with a minimal data allowance which unwitting users quickly exceed, leaving them to face excess usage fees that are multiples of their regular monthly bill.

Optus’ cheapest $19/month plan comes with only 100MB of data, which many users would still blast past in the course of a month, and attract an excess usage charge of 35c/MB – almost a third of what Telstra levies, but still enough to pack a significant sting at the end of the month.

Vodafone’s plans being with a more realistic 250MB of data for $69 per month with excess data costed at only 12c/MB. All three carriers offer heavy-duty plans of 1GB to 3GB, but with high monthly fees starting at $149.

The ACCC’s warning isn’t restricted to the iPhone but applies to all 3G smartphones, many of which make it easier than ever to access the Internet on the go (especially when coupled to a laptop) – and in doing so, download high amounts of data that can blow out your monthly mobile bill.

“Consumers can download greater amounts of information from the Internet than ever before” said ACCC Chairman Graeme Samuel. “With this comes the potential for them to exceed their phone plan value and incur considerable additional charges.”

“The ACCC is particularly concerned that consumers may be misled if they are not made sufficiently aware that their data allocations can be exceeded – at significant cost” Samuel warned. “Not all carriers offer high volume data plans, so we encourage consumers to compare the offers of each carrier, taking particular note of the excess data usage fees.”

APCmag.com's own independent comparison of iPhone plan value from every carrier can be found here.

The regulatory body also expects carriers to do their part in making data limits and excess fees more transparent.

“Earlier this month the ACCC wrote to telecommunication carriers alerting them to concerns about the potential for consumers to be misled about mobile data usage charges. We have asked carriers to advise how they intend to deal with this issue and what information they will be providing to consumers.”