Smart phones are becoming popular Christmas gifts, but Legal Aid Queensland is warning consumers to do their homework before signing their contracts.
Legal Aid Queensland senior consumer lawyer Paul Holmes said he was expecting calls after Christmas from people wanting help with contract problems including debt management and termination fees.
“The biggest problem we see is with lock-in contracts,” Mr Holmes said. “Most contracts have no cooling-off period, so people need to ensure they’ve done their homework, have checked the fine print and know their rights before they sign anything.
“People usually come to us after they’ve found themselves trapped in mobile contracts and the problems usually start when they’ve got behind with their monthly payments.
“In many cases we see, their debt has kept building and, because of the contract’s terms and conditions, it’s nearly impossible for them to afford to pay their contract out and walk away.”
Mr Holmes said most people put the contract pay-out in the “too-hard basket”.
“People need to know some phone providers have specific hardship policies, so they may be able to negotiate a more workable payment plan.
“We encourage people to at least ask their phone company for financial hardship provisions if they’re struggling to make their payments – the worst they can say is ‘no’.”
Mr Holmes said consumers should also know the difference between pre-paid and post-paid contracts.
“Pre-paid phone contracts are where you buy the phone and then purchase phone credits to use, while post-paid phone contracts are where you pay for the services you’ve used at the end of each month,” he said.
“Many people don’t realise that for some of these contracts they’re only leasing the phone and will not own it at the end of the contract.”
Mr Holmes says recent changes to the Telecommunications Consumer Protection Code means phone companies must now sell responsibly and assess whether people can afford to make repayments under a contract.
“When you’re talking to a provider, make sure you tell them about your needs (and that includes your budget) as Telecommunications companies are now required to sell you a product that properly meets them.
“It sounds simple, but by informing them about your needs, this can protect you if you get into serious financial trouble.”
Mr Holmes said people with a mobile phone contract problem should talk to their service provider first but if they can’t resolve the problem, they can contact Legal Aid Queensland on 1300 65 11 88, or a financial counsellor on 1800 007 007, or the Australian Communications Consumer Action Network on 02 9288 4000. For more information about making a complaint about a telecommunications provider visit the Telecommunications Industry Ombudsman website.
Media contact: Amanda Catania (3917 0407) or Caroline Page (3917 0457)