Should your mobile network stop you spending?
Why don't mobile networks just stop you from spending above your limits?
Ever been landed with a huge mobile bill? You're not alone.
According to research from Ofcom, the average bill shock caused by exceeding a data allowance is £30.
When the excessive bill was caused by using data abroad that rises to £61 on average.
About 2% of all excessive mobile bills come to over £100.
Responsibility for excessive bills is a decidedly grey area: about two thirds of those hit with big bills don't complain and the vast majority of those say that's because they felt it was their fault.
But it needn't be. Shouldn't mobile networks make it easier for us to stop spending?
The opt out cap option
Ofcom, the communications regulator, thinks so.
They've been suggesting for a while that operators could introduce a cap on all contracts. Consumers would have to opt out of the cap to spend more.
In other words, customers wouldn't be able to spend more unless they'd specifically authorised it either at the point of the excessive charge or in advance.
However, mobile networks are reluctant to do that for two reasons. First, they argue, customers already have a lot of scope to avoid unexpectedly high bills and, second, the technology available to set caps is too unwieldy to be truly useful.
Let's look at those two objections in more detail.
Already an option?
Most networks offer opportunities to limit spending of one form or another.
Caps with Three and Tesco
Two networks - Three and Tesco - already offer caps as an option for those that want them.
Three's plan means your phone shuts down once all the texts and minutes in your monthly allowance are gone. Customers with the plan can't call any 'out of allowance' numbers such as 0845 customer service lines.
Tesco do the same thing - if customers get to their cap they can top up with PAYG.
There are some limitations.
For example, Three note that the service "may not work if you use your phone abroad or if we're carrying out important system maintenance" which doesn't exactly bode well and adds weight to the argument against caps based on technical limitations (see next section).
Most operators - in fact, all except Orange - offer text alerts when customers reach their existing data allowance.
It's not a cap but high bills caused by unexpectedly large domestic data use have reduced significantly since alerts became standard which suggests that it stops a lot of high spending before it occurs.
On the other hand, the problem with asking consumers to monitor their usage is that most of them don't.
Although about three quarters of consumers polled by Ofcom in February this year said they were aware that they could check up, fewer than half actually did.
More than half of consumers polled said they weren't aware they could set alerts for usage.
Just 16% had actually set alerts up.
A more proactive option for consumers might be to just get an unlimited tariff.
However, unlimited deals are usually subject to 'fair use' policies which may still put very heavy users in danger of bill shock.
In addition, expensive unlimited deals don't suit those who are already short on cash and therefore will be in a worse position than many if faced with a high bill.
Finally, O2 use monitoring software to track phone usage based on past behaviour - in the same way that banks monitor the payment behaviour of credit and debit card holders - to catch and query unusual usage.
The downside is that the system only catches very high usage. Just as with money, it's most useful for finding fraud.
As noted above, those offering caps already warn that about glitches.
Were the system to be rolled out among all networks those problems could quickly multiply.
The key problem appears to be that networks would not be able to monitor usage abroad since billing information has to be sent from the foreign partner network.
That's a shame because use abroad is one of the largest causes of excessive use.
However, it is a little hard to stomach these objections since within the EU there are already mandatory spending caps in place and operators get around the time delay in the EU and beyond by having consumers pay up front in the form of add ons.
Cost of upgrading
Operators also complain that the cost of updating their systems would be prohibitive and likely glitchy in a way that could actually damage consumers.
Ofcom apparently can't order networks to be competent.
Should your network stop you?
So, as we've seen, while there are a number of services aiming to limit excessive bills all have their limitations and the complexity and sheer number of them might confuse consumers.
Spending caps could offer a solution: they're both a unified system and one that seems fairly simple for consumers to understand - they wouldn't even have to opt in.
Let's hope Ofcom push past the reluctance on the part of the networks.