The customer purchased basic mobile online from an electronics store for the purpose of being able to text and make emergency calls. He used a relative’s credit card to pay for the handset. It was not a smartphone, it simply had a small screen and touch button that was ideal for occasional usage. The customer understood that the phone came with a voucher for a 30-day plan containing 32GB of data. When the phone was purchased, there was no mention of signing up for a repeating plan, nor was the ongoing cost of a plan or the need to cancel the same communicated by the electronics store.
When the customer received an email stating that the 30-day prepay plan was being renewed with no mention of invoicing, he presumed this meant the data he received from the voucher rolled over. After eight months of using the phone, the customer grew suspicious of the emails and followed a link in the renewal email. He realised that he had been invoiced $55 per month for the plan, and that his relative was being charged for this.
He was surprised to find that the plan included 32GB of data and unlimited calls and texts, which he considered excessive for such a basic phone. The customer demonstrated that his use of the phone had been minimal and nowhere near the level permitted in the plan. The customer contacted the provider to ask for a refund. The provider canceled his plan and agreed to refund him $55 for one month’s usage.
The customer contacted TDR for assistance, stating that he did not believe that he entered a contract at any stage for a plan and considered the provider was deceptive in the way that it had sold the plan. The situation was confusing for the customer as he had bought the phone from an electronics store but was being billed and contacted by a phone company. He wanted a full refund for all the phone plan charges over the eight months. TDR appointed a Resolution Practitioner to assist with resolving the dispute. As the customer and provider could not reach an agreement together, the complaint progressed to adjudication, where TDR makes a decision on the matter.
TDR gathered information from both parties and investigated the following points:
- Whether a clear contract had been provided upon purchase of the phone
- Whether the contract provided information on the plan along with the transparency of pricing.
TDR found that calling the plan a voucher implied it was a free bonus and that the phone provider had, therefore, not set out clearly in the terms and conditions that the customer would be charged. While it stated in the fine print that customers can cancel the selected plan at any state, it was not unreasonable for the customer to ignore this statement as he had at no stage actively selected a plan. The plan was presented with the phone as a voucher. There was no option to select or deselect it. TDR found that the provider had breached the relevant provision by not providing a contract that clearly and explicitly stated the terms and conditions of the cost and renewal period in plain and understandable language.
TDR upheld the complaint, and the customer was entitled to a full refund of the plan dating back to the purchase of the phone.