For young people mobile phones are not just a communication tool, they are also a status symbol. Entering into a mobile phone contract can be a daunting prospect for a young person, particularly if your financial experience is limited.

Consumer surveys and recent academic studies are telling us that mobile phone debt is a significant issue for young people.

In reality, there is no such thing as a “free” or “$0” phone; the true cost may be buried in the contract; credit limits and call caps may not be what they seem. Young consumers need to shop around, not just for the best financial deal but also for the best provider – one that has clear and fair contract terms that show the true cost of the commitment.

Many of the latest offerings of content services on mobile networks come at a premium price and charges can mount quickly, often beyond a young person’s capacity to pay. (See Case Notes)

In the case of people who have not reached the age where they can legally enter into a mobile phone contract, the temptation to have someone else sign for them is strong.

The TIO continues to receive complaints from people, particularly from parents on behalf of their children, who are being pursued for large outstanding mobile accounts.

These people have signed a contract for someone else but may not have any say over how the phone is used. It is important to remember that mobile phone contracts do not make provision for a person to act as guarantor for another individual. Being listed as the primary account holder on the contract usually means that the provider sees you as liable for the service regardless of who uses the phone.

A common scenario occurs when an 18-year-old signs a contract on behalf of a younger friend. As the billing address is usually that of the person who uses the service, the 18-year-old is generally not aware that the contract has been breached for non-payment until a collections agent approaches them. Here are some “look before you leap tips”:

• Read both the advertising material and the written terms relating to any contract. Compare these with each other and with what the sales person has told you.



• Get an idea of the real cost of the contract.
  
  
• Don't feel forced or threatened to sign on the spot.
  
  
• Find out about available protections such as call barring, particularly to premium rate services.
  
  
• Be wary of signing a contract on behalf of someone else. If a sales person uses terms such as “guarantor” or “referee” do not sign the contract.
  
  
• Visit the Australian Communication Authority’s Mobile Phone Toolkit site at http://toolkit.aca.gov.au/.

If you do fall into any of the traps, don’t keep quiet – take your complaint to the company you bought the phone from. If they won’t assist, you can lodge a complaint with the TIO.