Telcos ditch their dud deals

SOPHIE ELSWORTH

Organise travel insurance before you go on holiday so if you do get sick, have an accident or get robbed, you won’t be out of pocket. Picture: iStock

PEACE OF MIND:

GRAB a handful of money and flush it down the toilet. Sounds crazy, right? Well, that is how I interpret phone-leasing deals.

They were appalling offers the moment they were released and it’s no surprise they have now come to the attention of Telecommunications Industry Ombudsman (TIO) Judi Jones.

Telstra and Optus both rolled out these offers in the last couple of years, giving customers the opportunity to lease a phone and be left with absolutely nothing at the end of the deal.

Their rival, Vodafone, never offered them.

The offers were different to traditional phone contracts, where at the end of the term you end up owning a handset.

And that’s a good thing – even if you don’t want the device – because these little pieces of technology are actually worth something if they are looked after.

I’ve sold so many unused mobile phones sitting in my drawer at home in exchange for some quick cash.

But what really made me cross was the telco giants, for a period, defaulted customers to leasing options when they searched for a phone deal online, ahead of standard mobile phone contracts.

And for the oblivious consumers, this could very easily go unnoticed.

Before you know it , you’re locked into a phone leasing deal that requires you to hand back the device at the end of the term.

While the telcos have put some serious spin on why they suddenly dumped these deals, I smell a rat.

Telstra said they were no longer selling leasing plans “as we launched a new range of radically simplified post-paid mobile plans, offering customers greater flexibility with no lockin, customisable plans”.

Optus told me they dropped their leasing plans because it was “the first step in us simplifying our offerings to deliver exceptional value and service to our customers”.

In my view these deals should have never been offered in the first place.

They simply left customers in a revolving position that would see them constantly being able to upgrade their phone but never actually own their handset.

Dozens of confused customers have recently contacted the TIO, unclear on why they are receiving demands to hand back their handsets.

On the deals, customers usually paid $10 less a month than the cost of a traditional contract. They could then upgrade to a new smartphone 12 months later for an additional $99 or buy the phone at the end of the contract.

And if the phone was damaged at the lease’s end, they could be hit with charges up to $499 if they handed back the device in poor condition.

It was a win for telcos: Get customers on deals where they never own the device and keep rolling them on to new leasing deals.

Thank goodness these offers have now disappeared, and those customers who are still on these deals can be assured they won’t be stuck on them once they finally end.

PERSONAL FINANCE WRITER While the telcos have put some serious spin on why they suddenly dumped these deals, I smell a rat

@sophieelsworth