Mobile phone contracts - tips for consumers

Before buying a mobile phone

Understand these terms:

  • service provider: the company that connects your mobile phone to a network so you can make calls and send emails
  • premium SMS: text messages used for services such as voting on reality television, competitions and content subscriptions. If you choose to send or reply to a premium SMS, you may end up signing up to a service with a very expensive call rate. It can be hard to cancel without it costing you more
  • international roaming: using your mobile phone overseas to make or receive calls. This can be expensive. Make sure you read the terms and conditions so you know how much you will end up paying for this service
  • 32GB/16GB: these figures usually appear in the plan description and refer to the storage capacity of your mobile phone, not the data download allowance.

Decide:

  • how many calls and texts you are likely to make
  • how much data you will need. For example, if you check emails or search the internet frequently, you may need a plan with a higher monthly data download allowance - usually 1GB or 2GB per month. Check the service provider's website for more information on data usage
  • how long you want to be in a contract. Contracts can range from 12 to 36 months. If you are not comfortable signing a contract, try a pre-paid service first. Once the recharge card runs out, you can choose to stay with that network or choose another one.

Make sure you:

  • shop around and compare the prices, conditions and plans of different network providers
  • get information in writing about services and charges
  • understand the costs if you change or break a contract, or if your phone is broken, lost or stolen
  • read the warranty paperwork to find out what is and isn't covered
  • know how you will be charged if you use your phone overseas.

Look for:

  • a mobile phone that is easy to use
  • a plan that you can afford
  • a service provider that has good network coverage in your area. 

Remember:

  • you often have to pay more to cancel a contract before it ends
  • some services have extra charges - voicemail, call-forwarding, premium SMS, internet browsing, purchasing apps and international roaming
  • check the service provider’s website or visit their store to see if you will get coverage in the areas you use your mobile phone
  • there may be extra costs for going over your phone call or data allowance limit.

Warranties on mobile phones

  • Keep receipts and contracts as proof of your purchase.
  • Retailers and service providers do not have to offer a loan or replacement phone during warranty repairs. However, some have a policy to do so.
  • Depending on your contract terms and conditions, you may have to continue paying your monthly bill while your phone is repaired. For more information about warranties, view our Warranties section.
  • You also have rights under Australian Consumer Law. If your mobile phone stops working, you may be able to ask for a refund or replacement. For more information, see our Refunds, repairs and replacements page.

Before signing a mobile phone contract

  • Always read the contract – do not rely only on what the salesperson tells you. A mobile phone contract is legally binding. It is usually difficult and expensive to cancel.
  • Be alert to hidden costs and unfair contract terms. For more information, view our Mobile phone providers - unfair contract terms page.
  • Never sign a contract you do not understand – ask someone who understands the contract to explain it to you.
  • Check how much the monthly bill will be, plus any additional charges. Make sure you can afford these for the duration of the contract.
  • If you buy a handset and connection with a retailer, you may be entering into two different contracts - one with the retailer for the handset, and one with the service provider for connection to the network. This means that the retailer can help you if there is something wrong with the phone, but not with any network connection problems.
  • Think carefully before ‘going guarantor’ on a contract for someone under 18 – you will have to pay their bills if they cannot.
  • Learn more about your rights and how to exercise them on our Contracts page.

After signing a mobile phone contract

  • Keep a copy of the contract in a safe place, so you can refer to it later if necessary.
  • Let the service provider know if your situation changes - for example, if your mobile phone is lost or stolen, or you cannot afford to pay the bills.

Managing your mobile phone bills

  • Check your data usage frequently – it may help you avoid large bills.
  • Know how much your bill should be and ask your service provider about any unusual charges.
  • If you need help budgeting or calculating your repayments, contact Money Help.
  • Pay your bills on time. If you don’t, you may get charged additional late fees.

When things go wrong

Last updated: 24/09/2014

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