A recent breakdown of IMR traffic indicates that data use is the main service used by travellers, accounting for 72 per cent of usage. Voice and SMS use constitute 23 per cent and 6 per cent respectively10. The high use of data correlates to the higher charges and unfamiliarity by consumers over data usage, which both contribute to bill shock.
Consumer Complaints
An indicative measure of the prevalence of bill shock is the complaints data compiled by the TIO. Over the past eight quarters (March 2011 to March 2013), there were 9,328 complaints to the TIO relating to IMR11. The peak quarter for complaints was the September 2011 quarter with 1,531 complaints. This trend has been slowly declining since, with a low of 472 complaints in the most recent quarter (March 2013). Disaggregated data (i.e. on a per country basis) is not available. Overall, 3.4% of mobile complaints referred to mobile roaming charges in the 2011-2012 calendar year12.
Although a direct link cannot be established, this declining trend coincides with greater consumer awareness information introduced by the industry, for example, the introduction of notification systems.
IMR complaints to the TIO involved around $8m in disputed charges over the five quarters between December 2011 and December 2012, averaging $1.6m per quarter13. The average disputed amount per complaint was $1,700 for customers of the three MNOs (Telstra, Optus & Vodafone) and $1,000 for the MVNOs14. For the most recent quarter of data, average individual disputed amounts have increased. Complaints in this quarter are averaging $2,500 for customers of MNOs and $1,300 for customers of MVNOs15.
This means that the average disputed amount per complaint to the TIO is increasing, with more than 50 per cent of complaints to the TIO now for amounts greater than $1,000. TIO information indicates individual cases of mobile roaming bill shock can be very significant for the consumers who lodge a complaint with the TIO. This can, in rare cases, lead to extreme amounts being disputed. In one instance, a customer who requested a $129 plan for a nine-week holiday in Europe returned to a $75,000 bill. Subsequent bills increased this amount to $147,90816.
Chart redacted, Commercial-in-Confidence.
The TIO numbers do not reveal the entire bill shock caused by IMR charging as a number of complaints are resolved by the service provider (customers must make a complaint to their service provider prior to lodging a complaint with the TIO). These complaints that are resolved prior to reaching the TIO generally involve the service provider writing off a significant portion of the disputed charge amount; they also involve considerable time and expense on behalf of both customer and service provider to resolve. Research conducted by the ACMA during the RTC Inquiry indicated that 11 per cent of customers have lodged a complaint with the TIO; with 3 per cent of customers surveyed doing so in the last six months to September 201117.
Using the average TIO disputed amount figure of $1.6m per quarter, IMR complaints constitute $6.4 million annually. Assuming that only 11 per cent of complainants reach the TIO (as per the ACMA’s research during the RTC Inquiry) and that the remainder of these complaints are satisfactorily resolved with the charge reduced or written off by the providers, this puts an approximation of the amount of disputed IMR payments at $58 million annually. Xxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx..
In addition to the above figures estimated and supplied to the ACMA, the TIO has also provided a number of case studies as examples of bill shock. These case studies are provided as part of the TIO’s public consultation submission and support the RTC Inquiry findings that a lack of information on how charges are levied and a lack of information of how these charges accumulate are the two core causes of bill shock.
Current consumer information on roaming provided by industry
Two of the three large providers already give their consumers some information via push notifications about roaming on arrival. The first requirement therefore under the Direction may only have minimal further impact on the number of complaints relating to IMR to the TIO. It is anticipated that Telstra’s recent announcement of data alerts will reduce bill shock, however it will be some months before any quantitative information on this impact is available.
While the status quo or business as usual approach has improved the IMR information consumers of the major providers receive when they are overseas, it does not ensure MVNO customers have the ability to opt-out of IMR services at any time while overseas. Customers of MVNOs also may not receive information that they are roaming, information on arrival about charges, usage alerts or spend management tools.
There is some prospect that the frequency of “bill shock” associated with IMR services would reduce over time but not as quickly or to the extent likely to be achieved under the proposed regulatory options consider in this RIS. With no mandated spend notifications or spend management tool, the status quo does not ensure consumers can easily monitor and manage their usage while overseas.
While spend management monitoring via apps is likely to be a very useful initiative for customers who are familiar with organising, tracking and monitoring their IMR usage, it is less likely to be useful to consumers who are unaware of the risks of using IMR services. It is these customers who are more likely to be the subject of bill shock.
The key causes of bill shock were identified by ACMA research conducted during its Reconnecting the Customer (RTC) Inquiry in 2011. The key causes are18:
“A lack of consumer understanding of the basis on which charges are levied ...ACMA’s research suggests that consumers who have experienced bill shock do not rate pre-purchase information as particularly useful in preventing the risk of bill shock”
“A lack of consumer understanding of the rate at which those charges accumulate.
The MNOs have introduced measures to provide IMR information to their customers beyond the current regulatory requirements. All major providers meet some of the minimum requirements under the Ministerial Direction. It is unclear whether these measures would have been introduced without the interest of the Government in IMR matters and whether it will be maintained without regulatory intervention.
The three mobile network operators, Telstra, Optus and Vodafone, already allow consumers to opt out of IMR services at any time.
However, consumers do not always have access to information about how to disable those services while travelling. Nevertheless, there are a number of methods currently that provide consumers with the ability to monitor their expenditure while travelling while there is no requirement to advise consumers when high levels of expenditure have occurred. In many cases, this expenditure can be inadvertently accrued through the use of data on smart phones.
Further information on current consumer roaming information provided by the three MNOs is provided below.
Vodafone:
Vodafone appears to provide the most comprehensive notification systems among the big three providers. Vodafone has provided ‘on arrival’ notifications to its customers since 2010. Vodafone international roaming notifications are sent via SMS and include:
Notification that the customer has arrived in the destination country and is using IMR services with information about the price of making a call, receiving a call and sending a text;
A second SMS relating to data per MB (only sent if data is activated on that customer’s service) and an invitation to the customer to purchase an add-on service.
Vodafone also provides an SMS alert for customers when they arrive back in Australia to advise that they are no longer using IMR services, and to turn off and Overseas Data-add on packs (if applicable).
Relative to the Ministerial Direction these notifications do not include the cost of receiving an SMS message at an overseas location, advising customers at point of destination of the opt-out mechanism, and the lack of warning message prior to the pricing information.
Vodafone offer an opt-out option via the MyVodafone app and webpage; customers who opt-out of IMR Services electronically can do so free of charge.
Customers can access usage details via MyVodafone, which is available online and as a downloadable App for most mobile operating systems. No level of usage related push notifications are included as part of Vodafone’s spend management suite.
Optus:
Optus requires customers to ‘Opt-In’ for IMR services at the point of sale for post-paid customers. Optus customers can use the MyOptus app or call +61 2 8082 5678 to opt-out of IMR services, which attracts a 50c flat fee.
Optus does not provide an ‘on arrival’ message to its customers, nor are pricing messages provided to customers when they activate IMR services at an overseas location. Optus provides push notification measures for many of its IMR customers, sending SMS notifications to post-paid non-corporate customers every time they use 5 MB worth of data.
Optus does not provide estimates of the customer’s spending. It does not provide information to customers about when data packs expire and casual charging rates are levied.
Optus has introduced ‘unlimited data passes’ for residential customers in late 2010 xxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxx. More recently, Optus noted in its initial submission to the ACMA that xxxxxxx xxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxx xxxxxxx xxxxxxxx xxxxxxxxx xxxxx. Xxxxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxx xxxxx xxxxxxxxxxxxxx
Telstra provides on arrival text messages that the customer is roaming to pre-paid and post-paid customers. These messages do not contain pricing information; they consist of a warning notification, a Telstra support message (different for pre-paid and post-paid customers) and a message advising of the data usage notifications they may receive. Help line numbers are included in this message (depending on whether a customer is pre-paid or post-paid). The ACMA understands that customers can call these numbers and turn off international mobile roaming at this time for a maximum fee of 50c, although this is not made clear in the notification.
On 30 April 2013, Telstra announced an international data usage alert system where an alert is sent to customers for every 20MB of data they use overseas, except in Hong Kong. xxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. Telstra is sending a special message to customers roaming in Hong Kong advising them that they will get 20Mb alerts, except in Hong Kong. Telstra does not provide information to customers about when data packs expire and casual charging rates are levied.
MVNOs:
The resellers the ACMA has liaised with require customers to ‘opt-in’ to use IMR services. The TCP Code requires that IMR information is provided on websites and at the point of sale by inclusion in the Critical Information Summary that is provided to all consumers. Many larger MVNOs predominantly offer pre-paid services and this minimises the risk of bill shock due to IMR.
At present, MVNOs are unable to provide notification that the customer is roaming, information about charges; usage alerts or spend management tools. While the TCP Code addressed the issues of consumer information and usage alerts, this was only in respect of domestic services.
