Phone bills put on hold as a rule

AUSTRALIANS default on phone bills more than any other type, according to new research.

Bills from telecommunications companies account for 42 per cent of those that go unpaid, followed by gas and electricity bills at 30 per cent, the research indicates.

Credit card bills from banks are next, making up 15 per cent of those that go unpaid, according to an analysis by Credit Simple, owned by debt collector Illion, and previously called Dun and Bradstreet.

Unpaid bills are also a gender issue, the research reveals, with men more likely to default than women.

Men are responsible for 56 per cent of all unpaid bills, including 65 per cent of personal loan defaults and 65 per cent of credit card defaults. They account for 58 per cent of unpaid telco bills, the research suggests.

Women, however, are responsible for most of utility bill defaults, at 53 per cent.

The analysis of default notices also found the average unpaid telco bill was $1580, while the average unpaid utility bill was $1040. For credit cards, the average unpaid bill is $9440.

Credit Simple chief David Scognamiglio said the growth in telco defaults was mainly because of increased phone usage.

“Not that long ago, a household had one phone line and one phone bill, but now there could be three, four or five phones in each household,” Mr Scognamiglio said.

Despite the high default rate, telco bills were often the most carefully managed for repayments.

“One of the things people give up last is their mobile phone,” Mr Scognamiglio said.

“They usually do anything to pay off the default and avoid the telco cutting them off.”

The average repayment period for telco bills in default was 214 days, according to the analysis, compared with 509 days for furniture rental bills and 352 days for credit card bills. For personal loan bills, the average was 326 days, and it was 223 days for gas and electricity bills.

Credit Simple also found there were two generational factors contributing to the high number of defaults among men.

In older households, the higher number was because accounts and household bills were more often in the man’s name.

However, with younger men – those under 35 – the higher default rate was because they were immature, Mr Scognamiglio said.

“Men are more likely to default than women before their mid-30s because men tended to mature slower than young women,” he said. “But overall, women have always seemed to have a better comprehension of creating and living to a budget.” Queenslanders were also the most likely to default, according to Credit Simple.