Hidden mobile plan fees: What you need to watch out for

30 May 2017

Have you ever been a victim of bill shock and been stuck having to pay ridiculous fees you didn’t even know existed?

Mobile plans can be complicated and there are many fees you have to pay, sign up fees, SIM delivery and of course the recharge or monthly fees for your plan.

We’ve made a list of hidden fees you might have to pay in addition to your monthly cost:

  • Credit card fees

  • Prepayment for postpaid plans

  • Excess data

  • International calls

  • International roaming

  • Late payment fees

  • Plan change fees

  • SIM card replacement

  • Payment dishonour fee

  • Paper bill fee

  • Staying in a phone plan contract

  • Early termination fee

  • Number porting fees

  • Unlocking your phone

Know where to look...

In truth, these fees aren’t hidden; but they are hard to find. This is an important reminder to always read the Critical Information Summary for a new plan before you sign up.

You’ll find the Critical Information Summary on the telcos website — usually at the top of the plan description. Here’s an example of the link to the Critical Information Summary on the Optus website.

Other fees are found in the provider's general terms and conditions, which you will also find on their website.

Credit Card Fees:

Not quite a hidden fee, but still an addition to the monthly price of the plans. Credit card charges are usually around 2-3% depending on the type of credit card you use.

Prepayment for postpaid plans:

When signing up to a postpaid plan, where you receive a bill at the end of the month, your provider may charge a prepayment fee. This is a security deposit for the provider that’s paid when you sign up.

Our advice:

  • If you get asked to pay a prepayment, check with the provider to make sure that this is refundable deposit that you get back when you end your plan.

  • These are uncommon fees, so you might consider a different provider that doesn't charge this.

Excess Data:

Have you ever received a text message informing you that your data limit has been automatically topped up with 1GB for $10?

Postpaid plans don’t block your data usage when you run out of data. Instead, extra data is added onto you plan, usually costing $10 for 1GB data block. If you’re unaware of this, you might be in for a nasty bill shock at the end of the month if you keep going over your data allowance. 

Your provider will notify you before and when they top your data up. You'll receive data alerts when you've used 50%, 85% and 100% of your monthly allowance.

Our advice:

  • If this happens often, consider switching to a plan that includes more data.

  • Contact your provider about switching your plan payment from postpaid (pay after you use) to prepaid (pay before you can use). Prepaid plans have no excess usage charges.

  • Contact your provider to switch off auto top up or do it from your account.

International Calls:

Do you have family and friends overseas and need a phone plan that include international calls?

Keep an eye out for plans where the international call inclusions are for calls to landlines only in selected countries, and where you have to pay additional for calls to mobiles.

If international minutes are included, the calls are usually rounded up to 1 min. So if you make a call that lasts 1 min and 4 seconds, this call will be counted as a 2 min call. This can eat up your minutes fast.

Our advice:

  • If you sign up to a plan with unlimited call inclusions, check whether the calls are to landlines or mobiles. Always check the call rates on the provider's website before signing up.

  • Use your data to call or message people using the same apps e.g. Whatsapp, Skype or Facebook messenger.

  • Skype offers call minute packs to landlines and mobiles in your chosen country. Check the prices here.

Roaming Charges:

Roaming is when you use your phone; make calls, send SMS/MMS or use the internet (not wifi) in another country. Because your provider does not have coverage in other countries, they ‘borrow’ the local provider’s service, at a cost.

Your provider will then pass the bill for using the local service on to you. Because the local providers are charging this, the bill may be delayed. It could take anywhere between 1 day and 2 months for the bill to arrive.

If you are on a postpaid plan, your provider may ask for you to prepay for roaming, or a security deposit, before activating data roaming on your account.

Our advice:

  • We always recommend to buy a local SIM in the country you are travelling in. It is usually the cheapest option.

  • Some smaller providers may not allow roaming. Check with your provider if they offer the service.

  • If you are going to use your phone in another country, turn off automatic updates for online services, e.g. facebook and email, so you are not using data in the background without your knowledge.

  • Your hotel or hostel might have free WiFi, so save uploading your pictures until you have a free connection.

  • Contact your provider in good time before you leave for your vacation. Data roaming may not be turned on in your account and could take time to activate.

  • If you know you’re not going to be using your phone overseas, check with your provider if you can turn off data roaming in your account.

  • Check out our comprehensive guide to international roaming here.

Late payment fee:

A late payment fee isn’t uncommon for any service, not just mobile phone plans. Most providers will add a one time fee of $10-$15 if your payment is late.

Our advice:

  • If possible, set up auto recharge on your account. Then you don’t have remember to pay every month.

  • Pay as soon as you get the bill.

  • Read the Critical Information Summary and be aware of late payment fees before your first bill arrives.

Plan change fee:

Changing plans with the same provider can sometimes cost you a small administration fee. The fee might be waived if signing up to a plan for the same price or higher.

Changing plans could cost you around $5 or the price of a replacement SIM card.

Our advice:

  • Check with your provider when changing plans if you have to get a new SIM card or if there are transfer fees

Replacement SIM card:

If your SIM card is lost or damaged, you can contact your provider for a replacement. Most providers will offer this for free, but it could cost you between $2-$25.

Our advice:

  • Check with your provider if you can buy a replacement SIM card in a store. You won’t only get the SIM card straight away, but you will also avoid paying the delivery fee.

Payment dishonour (direct debit rejected):

If you are paying via direct debit, automatically paying from your bank account, and you don’t have sufficient funds or they payment doesn’t go through, you might be charged a payment dishonour fee.

These fees are usually around $10-$15 added to your bill.

Our advice:

  • If you are having trouble paying your bills, contact your provider. They may delay your account because of financial hardship.

  • If there is money on your account but there was an issue with the payment go through, contact your provider and they might waive the fee.

Paper bill fee:

Getting your bill sent via mail could cost you $2-$3 every bill. This may not seem like much, but signing up to a 24 month contract and getting your bill sent every month can cost you up to $72.

Our advice:

  • Get the bills sent to your email instead. Not only is this free but then you don’t have to wait for Australia post to deliver your mail.

Staying in a phone plan contract after the contract end:

Again, not really a hidden fee, but definitely a waste of money. When you sign up for a two year phone plans it may seem like your phone is heavily discounted, but the plans often include the outstanding cost of the phone bundled in with the plan fee. If you keep using the same plan after your contract ends, it's like you are paying for your phone twice.

Plus, a lot can happen in 24 months. There is a good chance that your old phone plan now offers far poorer value that the new plans in market. It's time to compare plans and, probably, save some money.

Our advice:

  • Keep an eye on when your contract is up and switch to a new phone plan or SIM only plan as soon as the contract is finished, whichever you prefer.

Early termination fees:

If you have signed into a 12, 18 or 24 month contract and would like to leave before the contract ends, there is most likely an early termination fee.

Our advice:

  • You can find the fee in the Critical information Summary of the plan you signed up to. The fee generally lowers every additional month you have been with the plan.

  • If you know you’re going to want a new phone or plan within 24 months, buy the phone outright and go on a SIM only month to month plan.

  • If you would like to change providers, contact the new provider you would like to go with. They may pay some of the fee to help you out of a contract with your current provider.

Number Porting Fees:

You can always take your number with you when changing providers. This is great because it saves us from updating our phone number with all our services, accounts, friends and family every time we change phone plans.

Mostly this is free, but some providers will charge you when transferring your number. These fees are around $8-$11 and are usually only for postpaid numbers.

Our advice:

  • Check with your provider when switching from them.

Unlocking your phone:

Nowadays, most phones you buy on phone plans are sold unlocked.

However, if you buy a phone outright from a provider, specifically a cheaper phone sold with a prepaid SIM card, it will most likely be network locked. This means that the phone will only work with a SIM card from the provider you bought the phone from.

To unlock the phone and use another providers SIM card, you might have to pay a fee to unlock your phone from their service.

Outright phones on prepaid plans usually have different unlocking prices depending on how long you have been with the provider.

The prices are roughly $50-$80 if you have been with the provider for less than 6 months, and around $25 for longer. If you have been with the provider for over 2 years since buying your phone, unlocking your phone may be free. You can check this with your provider.

To test if your phone is locked, borrow a SIM card from a different provider from a friend and insert it in your phone. If the SIM card works, your phone is unlocked. If not, contact your provider for help to unlock.

Our advice:

  • Check the unlocking prices before you buy an outright phone.

  • If you’re a phone plan deal hunter and often switch providers, consider buying an outright unlocked phone.

  • If you travel a lot and want to have the option to use SIM card from other countries, you phone will also have to be unlocked.

The best way to avoid nearly all these hidden/extra fees?

We'll say it again: read the Critical Information Summary for the plan you are considering. Hidden fees are only hidden until you learn about them.

Go with a prepaid plan. There are some great prepaid options available with similar inclusions to postpaid. The only difference is when to pay, before you can use or after.

Give us a call or contact us here to find the best plan for you.

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