Crazy John's caught manipulating confusing contracts

Mobile phone contracts are notoriously confusing and difficult to understand. Different carriers, different devices, different plans. Contract? Pre-paid? Free calls? Texts? 3G? Mobile TV? There has been a high degree of dispersed coverage throughout the media over the years commentating on the confusing nature of choosing mobile phone contracts.

Research conducted by Nina Weerakoddy of Deakin University associates "...inflexible mobile contracts, confusing and aggressive marketing strategies specifically aimed at the teenage market, and inadequate information provided to prospective subscribers..." (Kingston, p.1-2) with mobile cost blowouts resulting in financial pressures on teenagers. Simply, the fact that mobile phone contracts are so confusing is a contributing factor for teenage financial strife resulting from mobile phone use.

Weerakoddy's research builds on that conducted by Customer Experience Measurement company, Global Reviews. Findings released in 2006 suggest:

"Australia's largest mobile telephone companies are leaving customers confused and unsure of their options.... The study revealed that major telcos left many customers unable to identify a suitable mobile phone plan online, that large numbers of emails receive no response, and that many phone operators did not actively seek to help customers identify the right plan for them.... Websites were also found lacking, with only one of the four telcos offering and online tool that helps customers choose a suitable plan. Most companies offered plan and pricing options online, but made it complicated for customers to understand which of those options was most suitable." (Winzer)

The clear connotation behind the findings of this research is that the major mobile phone telcos are complicit - even intentional - in creating customer confusion. I may be a bit suspicious, but when the major responsibility of a private company is to their shareholders, customer confusion, resulting in larger bills being collected by the telco, may just contribute to higher profits. What incentive is there to provide higher quality service and aim for clarity and simplicity in mobile phone contracts, if confusion gives a greater pay-off?

Perhaps this is just personal bias, but as the old saying goes: just because you're paranoid, doesn't mean they're not after you! I have been thinking for a long time now about getting a new phone - a 3G - but have put off in a large part by the confusing complexity of the options available, not just in terms of the devices, but largely in terms of the contract options. So, it was with a smug sense of satisfaction that I read today of the Australian Competition and Consumer Commission (ACCC) slapping a writ on Crazy John's (mobile phone provider) for misleading advertising.

The ACCC '...alleges the mobile phone dealer...engaged in "misleading and deceptive conduct" through its advertising. The ads offered handsets on its Crazy Phone Plans "free" of for "$0". But the ACCC alleges customers had to pay for the handsets through call rates that were higher than those available on comparable plans that did not include a handset. It says Crazy John's breached two sections of the Trade Practices Act." (Leyden, Jan 18, 2008, p.23)

No doubt Crazy John's will have a vigorous defence provided against this charge: that the ads are no longer running, that these plans are only a small percentage of their overall sales (10%), or perhaps that it has something to do with their use of the Vodafone network. Whatever the defence, and whether or not this mobile phone retailer is found guilty of false advertising, one thing is clear: the confusing nature of mobile communication options and contracts overall contributes to enabling manipulation of consumer perceptions of what is a 'good deal' when purchasing a phone.

A free phone no doubt sounds like a great deal, but with charges on mobile communications so varied across providers, how many consumers would really be able to tell if they were being charged to much for their use of the phone? Was it cheaper than any of the other providers? As the reserach of Weerakoddy and Global Reviews mentioned above points out, it frequently difficult to know.

References

Kingston, S. (June 27, 2007). Media Release. Deakin University. Retrieved on 18 January, 2008 from: http://www.deakin.edu.au/news/upload/A260620087Nina_phones_final.pdf

Leyden, F. (January 18, 2008). "Watchdog acts on phone ads." The Herald Sun, p.23.

Rennie, R. (January 17, 2008). "ACCC charges Crazy John's with false advertising." The Age.

Winzer, J. (May 10, 2006). "Mobile Telcos Not Helping Confused Customers." Global Reviews. Retrieved on 18 January, 2008 from: http://www.globalreviews.com/images/press10052006.pdf

Mobile Phones: from everyday to emergency

Much research demonstrates that a major motivation for having a mobile phone is for safety and security reasons. This is particularly evident in parental attitudes towards their children having mobile phones. The following two quotes come from separate – and very recent – reports conducted by the Australian Government’s Australian Communications and Media Authority:

“Parents…talked about the added security benefits that a mobile phone provided and how they relied on it to keep in touch with their children.” (2007a, p.10)

“Benefits arising from children’s mobile phone use are described in terms of including children’s safety and security, keeping in touch with family and friends, having the ability to make a phone call in an emergency and peace of mind for parents.” (2007b, p.31)

No doubt we can extend this belief in the comfort of always being connected, and the supposed safety and security this brings, to other individuals; that is, beyond simple parental concern for children. Certainly, children are not the only ones who find themselves in situations where their safety or security is threatened, situations where a mobile phone would come in handy.Recently in Australia there have been a number of instances where mobile phones have played a key role not just in individual safety and security, but in the resolution of emergencies that seem to transcend the everyday banality of their use. Three events drew my attention in recent months/weeks:

- miners caught underground during a Ballarat mine collapse in regional Victoria were able to contact authorities and rescuers on the surface using mobile phones. (Nov 19, 2007)

- recently two bushwalkers became lost in bushland. This was resolved largely with the use of mobile phones and the cameras on them: the lost bushwalkers were able to MMS images of surrounding topological features to authorities, facilitating a successful rescue. (Jan 3, 2008)

I would argue that mobile phones played a successful role in the resolution of the emergencies not because of their ‘special nature’ of being portable devices (of course this is important), but primarily due to their increasing banality! It is the very fact that they are found everywhere – in students’ pockets, in women’s handbags, in the briefcases and on boardroom tables – that meant they were actually present when needed in an emergency. It is the human element – remembering to use the capabilities of mobile technologies – that is the most innovative in these situations. In both cases, the people involved used these devices in such extreme situations only because they were such a part of their everyday life that they had them on their person. It is doubtful that the individuals involved actually thought in depth about how they their phones might be useful in such circumstances (though it may have crossed their minds), but rather, simply had the devices with them as part of contemporary everyday attire. It is not the devices themselves that are the exciting part, but the change in human behaviours.

We may frown at interruptions caused by mobile phones ringing at inappropriate times, but obviously, it is not the fault of the phones, but of the user: appropriate use of phones is a matter of individual behaviour. After all, these devices do not function all by themselves, but only through human interaction. The increasing capabilities of mobile devices are thus being utilized in a range of innovative circumstances: emergencies and life-threatening situations merely bring this more overtly to the attention of the media. But the use of mobile technologies in extreme situations is not wholly new, as was demonstrated by the use of ‘smartphones’ by embedded journalists during the Iraqi invasion of 2003.

Paul Levinson, in his text "Cellphone: the story of the world's most mobile medium and how it has transformed everything!" devotes a whole chapter of his text to the use of cellphones in warzones, pointing out how they change the way war is not only reported, but perceived by the media, and therefore, how the wider public understands such events.

It seems that the more these technologies become everyday and disappear into the fabric of social practice, the more likely they are to arise as tools of ‘salvation’ – or controversy (as depicted by the filming or articulation of crimes, such as during the Cronulla riots.). News reporting organisations no longer simply wait for something to happen involving mobile technologies, but actively solicit viewers to send in their own recorded footage of newsworthy events.

References

Australian Communications and Media Authority (Australian Government) (November, 2007a). Telecommunications today: Consumer attitudes to take-up and use. Canberra: Commonwealth of Australia.

Australian Communications and Media Authority (Australian Government) (December, 2007b). Media and Communications in Australian Families 2007: Report of the Media and Society Research Project. Canberra: Commonwealth of Australia.

Levinson, P. (2004). Cellphone: the story of the world’s most mobile medium and how it has transformed everything! Houndmills, Hampshire: Palgrave Macmillan.

Litras, P (Nov 19, 2007). “Trapped Ballarat miners rescued.” The Sydney Morning Herald.

“Phone photos save bushwalkers.” The Australian, January 3, 2008. Retrieved on 10 January from: www.theaustralian.news.com.au/story/0,25197,23002494-2702,00.html