It's pretty easy to get a phone, right? You sign up for a plan, they send you the handset and you start using it. It's important to know what you're signing up for, though. A lot of people don't look closely at their phone contracts and as a result end up paying more than they expected to.
There are heaps of phone providers and heaps of different kinds of phone contracts out there. So how do you know which one's a good bet and which one's going to cost you heaps? Here's are a few things to think about before signing up for a phone contract.
Cap vs. Pre-paid
Cap plans are plans where you pay a fixed amount every month for a set amount of calls, texts and data usage, but they don't limit the amount you spend. If you use more than your set amount - whether it's sending too many texts, calling too many people or downloading too much, you will be charged for the extra usage.
There might also be types of call or service not included, like sending photos or calling 1300 numbers, which will add to the amount you have to pay for at the end of the month.
A pre-paid plan is one that gives you a set amount of calls, texts and data, but when you've used up your set amount, you can't use the phone any more, until you pay another set amount. For some people, a pre-paid plan is a better way to make sure that they stick to their budget.
Call and Data Rates
Not every mobile provider charges the same amount for the same services, and not every contract offered by a single provider charges the same amount for the same services. Before you commit to a contract it's worth having a look at all of the charges associated with that plan. Common things to look out for include:
- How much is it to send a photo via MMS?
- How much do information calls cost?
- Are there peak or off-peak times for data use?
- How much will you be charged for calls if I go over my set usage amount?
These are just a couple of the things to think about when getting a phone. Remember: when you sign a contract you are legally responsible for paying the bills, so make sure you know exactly what it is you are signing up for, and NEVER sign a contract you don't understand or don't agree with.
Ring Tones, Games and Competitions
Some companies offer a bunch of extra fun stuff for your phone, like ring tones, horoscopes, love testers and other kinds of games and gimmicks. You can also sign up for regular competitions through these services.
It's important to be careful when signing up for any of these things, which are sometimes called "premium services". It's usually pretty easy to tell if you're signing up for one of these - the phone number usually starts with "19".
You might have sent a text to a 19 number, you might have voted for a reality TV show or talent show, or you might have entered your phone number on a website, but whatever the service is offering it's important to read the terms and conditions before you sign up. Most of these services are actually subscription services that send you stuff on a regular basis - and charge you for it too.
If you find that you've signed up for one of these services, you can usually unsubscribe by texting STOP to the number that's sending you stuff. You can also contact your phone company and ask them to block your phone from receiving any premium services.
If you have a problem with a subscription or premium service - DON'T IGNORE IT! Whether you're paying attention or not, you'll still be charged for the services. The best thing to do is get it sorted quickly. Premium service businesses are required by law to respond within two business days, so you should contact them directly in the first place.
If you're having trouble finding their contact details, your phone company should be able to help you, or you can check out www.19sms.com.au. If that doesn't work, you should contact the Telecommunications Industry Ombudsman, which is a free service for all Australians that helps to sort out problems with phone and service providers.
Dealing with Phone Debt
If you have a phone bill that you can't pay, DON'T IGNORE IT! The best thing to do about debt is to deal with it as soon as possible.
The first thing to do is to work out if you think you're actually responsible for the debt. Check your contract's terms and conditions, and if you think that you're being asked to pay for something you shouldn't be, you should seek legal advice. Organisations like Youthlaw have been set up to give young people legal support and advice.
If you do have a debt that is really yours, but you can't afford to pay the amount you owe, you should contact your service provider and explain your situation, asking for extra time to pay. Make sure you keep a record of your conversation with them. Ask them to give you a receipt number, or get them to email you with the agreed extended payment date.
If you think you're not going to be able to pay the debt, even with the extension, you should consider getting some financial assistance. Your family may be able to help you out, but if that's not an option, contacting a financial counsellor is a good idea. MoneyHelp offers a free financial advice phone consultation service that can help you to work out what your debt management options are.
The main thing is not to keep it to yourself. Dealing with debt quickly is the best way to do it.
For more about dealing with debt, check out our Managing Debt page.
ACCC - Choosing a Mobile plan
The Australian Compeitition & Consumer Commission has some fact sheets about buying phones, using the internet on your phone, and what your rights are if you have a problem with your phone.
Choice - Mobile Phone Plans Buying Guide
Choice, the consumer guide magazine, has a run-down on phone plans. The article was published in 2009, but it's still a useful guide to the phone marked.
Telecommunications Industry Ombudsman
The TIO is the national body that deals with complaints about phone and phone service providers. If you have a complaint about your service provider or a service you've signed up for, these are the guys to talk to.
The Victorian Government's financial advice website can help to put you in touch with a financial counsellor if you need help with debt management.
Melbourne-based agency providing free legal advice to young Victorians. Drop in, call up on (03) 9611 2411 or visit their website for more.
Some advice about shopping around for a phone or phone contract and how to deal with mobile phone debt.