Phone and internet customers say they are being disconnected, harassed by debt collectors and generally treated harshly by their telco providers when they need help, negatively impacting mental health.
The Consumer Action Law Centre has released a report detailing stories of people struggling to pay their phone and internet bills, with some fearing homelessness due to losing their job during the pandemic.
Despite a federal moratorium on evictions and banks allowing mortgage repayments to be deferred during the pandemic, debt collectors have continued to contact telco customers demanding repayments.
James* was one of those customers.
The 23-year-old lives in Melbourne and identifies as Aboriginal. He’s studying for a Cert III and receives JobSeeker and the Mobility Allowance for his disability.
He was contacted by debt collectors for multiple debts, including for a buy-now-pay-later purchase, a payday loan, a consumer lease and a Telstra debt of nearly $3,000 from three years ago when James entered into a 24-month contract for a Samsung Galaxy S8.
The salesperson conducted a credit check and knew James was on Centrelink. The monthly cost was $80, which James believed was affordable.
Two months later, he lost the phone and his insurance claim was declined.
James was told he had to pay out the contract so he complained to the Telecommunications Industry Ombudsman, but it was denied due to the SIM card still being active in another phone and the account remaining active with a usable number.
The $3,000 Telstra debt is now on James’s credit file as a default and he says he’s being harassed by debt collectors.
“It’s kind of scary because it is affecting my credit history and it is putting me back. I have received my credit file and there actually is a default on my credit file that makes me annoyed because I did have insurance with the phone and it should have been covered,” he said.
James said the debt collectors ramped up their calls to him during the pandemic.
“They just want payment. They said I could go on a payment plan but I don’t feel comfortable for something I had insurance for.”
He said there were some Telstra customer service representatives who wanted to help him.
“They said I should get a phone replacement but that people higher up kept saying no,” James said.
On Thursday, Telstra admitted to unconscionable conduct during its sales of mobile phone plans to indigenous consumers.
After an 18-month investigation by the ACCC, Telstra admitted it breached Australian consumer law and could face a penalty of up to $50 million.
In a statement, Telstra chief executive Andrew Penn apologised for the failings and the impact they had on people.
“I have spoken often about doing business responsibly, including about these failings since earlier this year. I am determined we have a leadership position and hold ourselves accountable in this regard,” he said.
Despite Mr Penn saying the “unconscionable conduct” occurred between 2016 and 2018, some Telstra customers say they are still being failed by the telco.
Katy* is an Aboriginal grandmother living in Echuca in Victoria who says she was pressured by Telstra representatives into putting her daughter-in-law’s mobile and internet bundle in her own name.
Her daughter-in-law had no formal ID and a poor credit history but wanted to buy the bundle for her daughter — Katy’s granddaughter.
Her daughter-in-law has since been incarcerated and Katy is having to pay for the monthly bill, which she cannot afford on top of looking after her grandchildren.
Speaking with Telstra’s hardship team proved futile, she said, after she was told there were no suitable hardship options available to her.
Katy has since complained to the Telecommunications Industry Ombudsman and is talking with lawyers from the Consumer Action Law Centre.
Fearing homelessness because of unaffordable phone bill
Ulka* is a pregnant woman from Melbourne who says she’s been hung up on multiple times by a telco company.
She has been experiencing poor mental health and is living on youth allowance and the JobSeeker supplement.
Last year, she signed a 36-month contract with a major telco provider for a mobile phone plan costing about $115 per month.
When she signed up to the plan, Ulka was working full time.
When the pandemic hit and Ulka couldn’t make her monthly payments, her provider restricted her service and blocked her from making outbound calls.
When she told customer service representatives that she was out of work, pregnant, and needed to be able to call her doctor, she was told she would need to pay almost $1,000 in debt in full to remove the restrictions on her phone.
Ulka asked if she could go on a fortnightly payment plan, but that was rejected.
She told her story to different customer service representatives but she says they all hung up on her.
Eventually, Ulka tried cancelling the service completely but was told if she did, she would have to pay out the phone and her debt in full.
The provider referred her to the National Debt Helpline but said her service would soon be cancelled.
Unable to pay the debt on top of her rent, Ulka feared she would end up homeless.
The National Debt Helpline referred her to a lawyer from the Consumer Action Law Centre who spoke to her provider and mentioned that she would be getting legal advice.
‘People left with unaffordable debt’
Consumer Action Law Centre chief executive Gerard Brody said the pandemic showed how reliant people are on telecommunication services.
“The COVID-19 crisis has confirmed, without a doubt, that telecommunications services are essential. Yet the telco industry continues to fail community expectations of essential services providers and is still not regulated as an essential service,” he said.
Mr Body said without directly enforceable rules by the independent regulator, people were “being left with unaffordable debt, poor or no financial hardship responses, the stress of unprofessional dispute resolution and disconnections”.
“It is clear that this lack of connectedness just won’t do — it denies people access to family, medical care, education, work and government services.”
*Names have been changed.