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7 million mobile phone users experience ‘bill shock’

Mobile phone users are paying more than half a billion dollars over their plans – known as ‘bill shock’, and close to 7 million of mobile phone users, or 45%, experience bill shock.

In a new report by Macquarie University, many Australians spend 50% more per month than expected, totalling around $557 million, with females making up a higher percentage of those receiving bill shocks (55%) to men (45%).

Women get stung twice as much from using premium numbers (1300, 1800 etc), and 50% more from dialling friends and family overseas.

Males are being slapped with 14% more data-driven excess costs than women.

The report also found that trading up to more expensive mobile phone plans doesn’t prevent bill shock, with the highest average bill shock incurred by those on $129 plans, followed by those on $59 and $60 plans, and then users on $49 plans .

Macquarie University’s Dr David Gray said that despite recent changes adopted by the industry being a step in the right direction, some of the bills they had viewed had left them scratching their heads. He added the concept of ‘included value’ in mobile plans needs to be more clearly communicated to consumers, and had been left unaddressed by the industry.

The major telcos, including Optus – owned by Singapore Telecommunications (ASX: SGT), Telstra Corporation (ASX: TLS) and Vodafone – part owned by Hutchinson Telecommunications (ASX: HTA), all offer a bewildering array of mobile plans – with the small print running to thousands of words for many plans. Both Optus and Telstra have run afoul of the Australian Competition and Consumer Commission (ACCC) for misleading ads in the past, including offering ‘unlimited’ plans that weren’t actually unlimited.

The Foolish bottom line

It seems obvious that more work needs to be done to clear up consumer confusion and reduce the levels and scale of bill shock. With the telcos benefitting from the extra revenues, it’s unlikely that they will adopt any new measures to help consumers – unless pushed.

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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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