Phone bills can be shockers

NEW gadgets often make our lives more convenient but there can be financial traps for the unwary.

So-called smart phones are a great example of this, with the Telecommunications Ombudsman warning that smart phones can create a nasty new condition now known as “bill shock”.

This can happen when the charges on your smart phone are much more than you expected, something that can easily occur if you've used the phone for internet downloads.

The Ombudsman reports people receiving smart phone bills of hundreds, even thousands of dollars.

Telcos have an obligation under the Telecommunications Consumer Protections Code to monitor customer usage and give you advance notice of any unusual or excessive patterns.

But I wouldn't rely on this as a heads up that you're about to cop a massive phone bill.

Mobile phone plans in general can be very confusing, so be quite clear about what is involved in your smart phone plan.

Finally, having an over-the-top phone bill is bad enough but if you find you can't pay, the overdue debt may be recorded on your credit record.

For the sake of a comparatively small sum you could find your ability to apply for something like a new home loan could be jeopardised in future.

For more ideas on how to trim your smart phone costs, log onto the website of the Telecommunications Industry Ombudsman at www.tio.com.au.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.



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