Mobile Phone Premium Service and Direct Carrier Billing Traps

Fair Trading Commissioner Rod Stowe today warned NSW residents to be wary of premium services and in-app purchases that consumers may have unwittingly subscribed to and are paying for through their monthly telephone bills.

“Fair Trading has received complaints from consumers left baffled by charges for extra services they have no recollection of signing up for and do not want,” said Mr Stowe.

“Customers should be aware that when payment is made for a download of a particular item such as a novelty ring tone, there may be hidden charges in the form of ongoing monthly subscriptions the consumer is automatically signed up for.”

‘It’s called Direct Carrier Billing and while it is a legitimate system by third party companies to enable payment for content on mobiles or tablets we are seeing more evidence of misuse.

"Consumers are often surprised by the additional services invoiced on their phone bill, which may be nominal, but are ongoing on a daily, weekly or monthly basis.

“This can be insidious, unclear and easily overlooked if someone is not keeping a close eye on their phone bills.”

Mr Stowe also urged parents to keep a close eye on their children’s usage of mobile phones.

"Adults need to be wary of allowing their children to play games on mum or dad’s device which may offer in-game purchase options that can be downloaded with the easiest touch of a little finger on a screen.

“While these extras offer variety and entertainment for young ones, they may come with expensive price tags, ongoing subscriptions and hidden costs.

"Some in-game purchases are directed at the younger, less experienced consumer and parents are encouraged to educate children on how these purchases work.”

Mr Stowe said users should receive a confirmation SMS on activation of both premium services and Direct Carrier Billing, in addition to monthly reminders from the third party service providers if one is subscribed.

If a consumer is paying for a premium service they do not wish to use, Mr Stowe advised customers to contact the content provider and unsubscribe.
“If a consumer becomes aware they have unknowingly subscribed to a service, or wants to end a service they have signed up for, the best way is to go the content site and cancel the subscription directly with the provider. You should receive a message from the content supplier confirming cancellation of the service.

“Consumers can also contact their service providers and ask them to bar all calls and messages from premium service providers,” said Mr Stowe.

“The relevant regulatory authorities will pursue any business breaching consumer protection laws in this regard.”

If a consumer pays their telephone account by a direct debit from their credit card and disputes a third party charge to their account, they can seek a "charge back" from their credit provider. If the credit provider establishes that the service was not authorised, they are able to re-credit the consumer's account.

Customers who are unable to resolve their problems with service providers can contact the Telecommunications Industry Ombudsman (TIO) on 1800 062 058

A consumer guide to in-app purchases is available on the Australian Communications Media Authority (ACMA) website

Customers who believe they have been scammed can report the scam to ACCC scam watch and should immediately contact their financial institution if they have provided their personal/account details.

Consumers unsure of their rights can also contact Fair Trading on 13 32 20.