Consumers Paying Millions Too Much For Mobile Phone Plans

Telcos are earning millions of dollars in extra revenue from selling mobile phone plans that don’t meet customers’ needs.

Consumer NZ chief executive Jon Duffy said the mobile bill report, released today by the Commerce Commission, showed a third of post-pay customers were paying too much.

About 25 percent were spending $139 a year more than needed to cover their usage. Another seven percent were paying as much as $584 extra a year.

“Telcos are earning millions extra in revenue from selling plans to these customers that are too pricey for their needs,” Duffy said.

A major problem consumers faced when choosing a plan was weighing up the confusing array of options.

“Creating confusion has been a long-standing marketing tactic in the industry. Telcos rely on it to reduce the likelihood consumers will shop around,” he said.

Consumer NZ’s research shows just 33 percent of consumers think it’s very easy to compare mobile plans. Only 38 percent think it’s very easy to switch companies.

Duffy welcomed the commission’s investigation into telcos’ pricing.

“Telcos know when a customer isn’t on the best plan and is paying over the odds. They should be required to tell their customers this and not just sit back reaping the gains.”

The commission is also calling on telcos to provide consumers with easy access to information about their usage and spending.

Duffy said this data was crucial for consumers to tell if they were being sold a product that was much more expensive than they needed to pay.

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