FinCap Welcomes Commerce Commission Open Letter To Telecommunications On Consumer Overpsending
FinCap welcomes the open letter sent by the Commerce Commission to New Zealand’s three mobile phone operators mobile telecommunications companies, telling them that they need to guard against overspending by mobile phone customers.
The open letter from the Commerce Commission is a proactive step to ensuring that people are paying the correct amount for their usage need.
FinCap’s Chief Executive Tim Barnett says, "We welcome the Commerce Commission’s encouragement of mobile telecommunications companies to support customers to be on the right plan for their needs. This could reduce financial hardship of people on the wrong plan.
"It is alarming to see that a quarter of mobile phone users are paying on average $11.60 monthly more than they need to for their mobile phone usage.
"Some people may be able to absorb this extra cost in their household spending, but for others this overspending may mean they fall behind in their payments.
"The consequences of falling behind on mobile bills could include bills being sent to debt collection or that customers experience drops in credit ratings. These measures can be very harmful to vulnerable consumers.
"Vulnerable consumers or consumers facing financial hardship are less likely to be proactively shopping around for better plans, because of the number of stressors in their lives."
FinCap believes that that addressing overspending is an important first step to addressing consumer vulnerability for the telecommunications industry.
We encourage the industry to take further steps to address consumer vulnerability including:
Waiving arrears for people in financial hardship as a result of overspending.
Referring people that are missing payments to Financial Mentoring services through the MoneyTalks helpline (0800 345 123)
Creating a simple process for Financial Mentors to advocate for their clients in financial hardship.
Creating an industry wide approach to hardship and vulnerability like in the retail electricity sector.