Miscommunication woes: Repayment plans gone wrong
Marco* had a great holiday but came home to find that he had incurred approximately $2,500 in mobile internet usage charges while he was away. Marco was upset with himself that he had not sorted his roaming better and did not dispute the debt. He contacted his provider to cancel his service and also asked for extra time to pay off the outstanding amount in instalments.
Marco’s provider agreed to a repayment plan in instalments. Because Marco was terminating the contract before the minimum term had expired, his provider charged a termination fee of nearly $500, which added to the outstanding debt. They agreed that Marco would pay $500 a fortnight and/or completely pay off the debt within 12 weeks, or his debt would be passed to a collection agency.
Despite his best efforts, Marco was unable to manage this repayment amount. He paid about $150 a week for several weeks but then ran into difficulty. He contacted his provider and attempted to negotiate a lower weekly payment. During the conversation, he advised that he could pay $50 a week.
His provider gave him a reference number so that he could set up a direct debit on his bank account and make the $50 payments. Marco continued making the payments.
However, several weeks later, he received a letter from a collection agency demanding immediate payment of the outstanding debt in full plus fees of over $400. Confused, Marco called his provider. He was told that there was no record of any agreement to pay a lower weekly amount. His provider advised that because it appeared that he had defaulted on the original plan to pay $500 per fortnight, the matter had been passed on to the collection agency.
The customer contacted TDR and made a complaint. Marco argued that by giving him a reference number so that he could set up a direct debit for $50 a week, the provider had accepted the revised payment terms.
TDR worked with both Marco and his provider. Following discussions facilitated by one of the TDR’s facilitators, the provider agreed that Marco had been genuine in his efforts to repay the debt and that there had been miscommunications and misunderstandings internally on changes to the repayment plan.
Marco and his provider agreed that he could continue to make $50 payments weekly and the debt collection ceased.
*Names have been changed to protect our customers’ identities