New rules governing mobile plan marketing

For years consumers have been complaining at the way mobile phone plans are promoted in Australia. Caps, unlimited, allowance, call rates, this is just some of the promotional wording used by the mobile phone providers. From September 1, 2012, new rules will come into effect changing the way mobile phone plans are marketed.

It is well recognized in Australian, that our telecommunication providers are making billions from the fact that most consumers have no real idea what allowances their mobile phone plans include. The statistics show that Australians are overpaying their communication providers by over $1.5 billion per year.

New rules are however on their way which will see common terms like "Caps" abolished and consistent methods introduced which make comparing mobile phone plans easy for even the most simple consumer.

The big problem we face today is that a mobile phone plan will come with what is called a "Cap". The "Cap" is in effect the allowance provided by the communications provider for Calls eg $300, Data eg 1GB, and TXT eg 100 SMS. The "Cap" also comes with a monthly price eg $30. Whilst it might refer to the value being offered by the plan, what it doesn't mean is that $30 is all you will pay for this value. If you accidentally spend more than your allowance provides eg on calls, your communications provider will charge you extra for this. Sometimes considerably more.

Earlier this week the Australian Communications and Media Authority announced the Telecommunications Consumer Protection (TCP) code. This code will define the new rules that all communication service providers must now adhere to. The rules have been designed to protect the consumer and to ensure they can avoid over paying for their mobile phone services.

The new code will deliver several new rules. Alerts will need to be introduced by every communications provider when a consumer reaches 50%, 85% and 100% of their monthly allowance. This covers phone calls, SMS and mobile internet.

Another important initiative is the banning of the marketing term "Cap". Communication providers will only ever be able to use this term where the plan has an actual limit that cannot be exceeded, ie $300 of calls. Once the consumer reaches the limit, they cannot spend anymore without making a voluntary decision to do so.

Where telecommunication providers promote the costs associated with a plan, the cost will need to include cost of a two-minute national call, a standard SMS and 1MB of data. The hope here is that one consistent format will make comparing plans much easier.

So times are changing in the world of telecommunications marketing in Australia and finally there will be greater focus on protecting the consumer from confusing advertising that draws them into plans which potentially cost them much more than they expect.

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