Mobile phone plans are still too complex and complaints are rising.

The rising use of smart phones has increased the number of complaints to the Telecommunications Industry Ombudsman (TIO) by 9%.  And that’s despite most telecommunications companies signing up to a new code of conduct. Overall complaints have dropped by 2%, with internet and landline complaints dropping by 17% and 19% respectively, according to the TIO’s latest annual report.

Retail consumers still account for the majority of new complaints – representing 86% of the total.

Telstra Corporation  (ASX: TLS) has made a substantial improvement to its customer service, resulting in a 21% decrease in complaints, and its third consecutive year of declining complaints, despite adding 1.6 million additional mobile customers. Meanwhile, Optus – owned by Singapore Telecommunications (ASX: SGT) has seen complaints against it rise by a massive 47%, driven by mobile service related issues, such as faults, inadequate spending controls and disputed internet charges.

Complaints against Australia’s third-largest telco, Vodafone – partly owned by Hutchinson Telecommunications (ASX: HTA), have risen 11%, despite the company losing more than half a million customers – or maybe that’s because of the issues.

The Australian Communications and Media Authority (ACMA) has recently been given new powers to create service provider rules, just weeks after the regulator authorised a new self-regulating industry standard. That was seen as the last chance for the industry to assuage consumer anger, before the government stepped in and enforced rules with legislation.

The biggest issue facing most mobile users is bill shock, and accounts for the majority of complaints. After signing up to a plan with a telco, most users have an expectation that their monthly phone bills will be around their agreed monthly plan. The shock comes when the bill is multiples of the monthly fee. The TIO used an example of one user on a $150 monthly plan receiving an invoice for $1,600. The next month the user received a $1,100 bill.

Another user received a $12,500 bill following an overseas trip, despite taking up a roaming data pack. When the user complained, the provider even said it had no record of his calls from overseas. The case was eventually resolved when the provider agreed to waive the full amount.

The Foolish bottom line

It’s no surprise that the government has stepped in. Many mobile phone plans are extremely complex, with much of the detail listed in the small print. Easier to understand plans are definitely needed.

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Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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