Watchdog vows to tackle 'bill shock'


The post-holiday blues could get worse if you discover you racked up a huge mobile phone bill whilst sipping cocktails by the pool. Britain's telecoms watchdog Ofcom has vowed to tackle the "bill shock" suffered by many people.

The regulator believes UK mobile phone companies should do more to prevent this happening. It threatened "mandatory" action if the industry does not play ball. While it's making all the right noises, what can you do to make sure you're not running up huge mobile bills?
Ofcom's research shows that up to 1.4 million customers with a mobile phone contract have been landed with unexpectedly high phone bills in the past six months.

Consumer group Which? welcomed the report and called for clearer information on mobile phone charges and greater protection for customers from massive data fees. Its executive director Richard Lloyd said:

"Ofcom's report confirms what consumers have been telling us for years - that bill shock is a big problem. We want clearer information for customers from the phone companies about what they charge for services in the UK and abroad, plus greater protection for consumers from hefty data charges.

Data roaming
"Ofcom must stand by its promise to investigate data roaming measures in the UK if EU negotiations fail and we want to see more pressure put on UK operators to adopt data caps and spending alerts."

Ofcom has written to mobile phone providers to ask them to promote 'opt-in' measures, such as tariffs that allow consumers to set their own financial caps or receive alerts about usage. It is considering whether financial caps and alerts that consumers would need to 'opt-out' of would be appropriate.

The Ofcom review shows that many consumers still don't know how to protect themselves and are often unsure how much they are being charged for data.

The regulator said the main causes of excessive bills were:

  • downloading data, primarily while travelling outside the EU, but also when using data in the UK (for example, customers using smartphones which may download data without the customer realising, or not realising how much data they are using);
  • using mobile voice services in the UK, mainly by exceeding inclusive allowances or calling numbers outside of allowances; and
  • lost or stolen phones – where the number of consumers affected is low, but the level of financial harm can be substantial.

Ofcom is talking to mobile providers about limiting the amount customers are liable for if their phone is stolen. At the moment, if a phone is nicked and thieves run up a huge bill the consumer may have to foot the entire bill, which could run into thousands of pounds.

EU cut-off limits
Under the EU Roaming Regulation, all mobile operators have to apply a cut-off limit once a consumer's mobile internet bill reaches €50 (around £42) per month, while travelling in the European Union. They must also send alerts to consumers when they reach 80% and 100% of their limit. Ofcom wants these limits to be extended worldwide.

The Body of European Regulators for Electronic Communications expects wholesale data roaming costs to fall to below 5 eurocents per MB of data by 2014, from 25 eurocents today. Retail charges are around €1 per MB of data. Ofcom supports proposals to enforce steep price reductions, which would mean that consumers will be able to download significantly more data when abroad before reaching the €50 limit.

Ernest Doku at price comparison service said: "Consumers are still being stung with unexpected high charges. A survey of mobile phone users carried out by us revealed that only a fifth of Brits check how much they'll be charged for using their phones abroad before they go, and four in ten have no idea of the costs."

What can you do to prevent bill shock?

Call charges
First of all, ask your service provider to explain what is included in your mobile or landline package. For example, check whether the tariff includes any free calls to non geographic numbers, such as 0870/0845 calls, or international destinations. If they are not free find out how much they will cost (per second or per minute).

If you make a lot of calls abroad, it is probably worth signing up to a specific international calling package. Check the terms and conditions on any free calls included in your package, for instance after what time can you make free evening calls?

Remember that 0800 may not be free from your mobile, as it is on your landline. Ofcom has a useful call costs guide when you are calling from a BT landline. Calling numbers such as 0845 is more expensive on mobile phones.

Using your mobile abroad
Check roaming prices before you go, especially if you travel outside Europe. If you travel a lot, shop around for the best roaming bundle. Use local WiFi hotspots rather than mobile internet.

Be aware that when outside Europe you may be charged if someone leaves a message on your voicemail, even if you don't pick it up. You can call your operator and switch voicemail off before you leave.

You can also turn off data roaming once abroad - many phones prompt you for this as soon as you step off the plane. Buying a local pay-as-you-go SIM card or local laptop dongle can save you a lot of money. If you travel to lots of different countries, you could get an international SIM card.

Stolen phones
Contact your provider as soon as possible to bar your SIM. Make sure you have your provider's lost and stolen number with you before you go on holiday. Ofcom has a list.

Premium rate texts
If you are receiving unsolicited premium rate text messages, you should contact your mobile provider and ask that they supply you with a contact name and number for the company that is sending these. If you are unable to resolve the issue with this company, you can get further advice from the premium rate regulator, PhonepayPlus.

Five biggest taxpayer stings
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Watchdog vows to tackle 'bill shock'

Most recently HM Revenue & Customs let Vodafone off the hook - for quite a sum. Vodafone paid out just £1.25 billion despite an original tax bill being closer to £8 billion (HMRC has always refused to reveal how much it thought the Vodafone final bill was). The episode was made even more shaming and painful because Vodafone was given several years to come good with the cash owed - even though it was sitting on a substantial cash pile at the time.

The Exchequer is estimated to have lost around £10 million to Goldman Sachs recently through an 'error' made by HMRC. The episode relates to an employee benefit trust run by Goldman allowing employees to take non-repayable loans that had no National Insurance contributions tied to them. HMRC did claw back the full amount from more than 20 businesses - but not Goldman. HMRC remains cagey about the details of the deal. Little HMRC accountability or transparency.

Huge problems with QinetiQ, the former Defence Evaluation and Research Agency, or DERA. A lack of clarity on contractual arrangements at the outset didn't help, allowing private equity company Carlyle to hammer the price down (why would you start negotiations when you didn't know the company's true value?). The Ministry of Defence behaved, it was said, like "an innocent at a table of card-sharps". Estimated cost to the taxpayer - £90 million. Huge sums were later made by QinetiQ management when the company listed.

The TaxPayers' Alliances estimates £2.7bn worth of taxpayer cash was wasted with a super-expensive 'National Programme for IT in the NHS'. The Department of Health, in the end, had very little to show for it as a consequence. Another example of poor management and a seemingly ingrained inability to provide taxpayers' with value for money.

"BT is paid £9 million to implement systems at each NHS site, even though the same systems have been purchased for under £2 million by NHS organisations outside the Programme", the Commons Public Accounts Committee noted.

Contentious. The Office for National Statistics estimated this has declined 3.4% since 1997, "with inputs increasing by 38%." The Centre for Economics and Business Research estimate that this inefficiency costs the taxpayer £58.4 billion a year.

Given the above record, are there any deals that the taxpayer has actually won out on? Not many, but the one successful project was the roll out of new Jobcentre Plus offices. It came in £314 million under budget, claims the Taxpayers' Alliance. A small cheer.


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