TIO Annual Report 2006/07

Case study - Landline over-commitment

The complaint

The complainant contacted the TIO over a disputed bill consisting of international calls made by a student lodging with her.

She said that she and the lodger had agreed that he would use his mobile phone and not the complainant’s home phone. The complainant’s phone accounts were usually around $250. Soon after the student moved in, she received a letter notifying her that her phone bill, which would be issued shortly, was higher than normal. She was shocked when she received a phone bill for over $10,000. The complainant suffered a major illness while the student was staying with her and was in hospital for some of this time. She was therefore not in a position to know whether he was using her phone. The lodger told the complainant that his mother would pay the bill. She contacted the mother who said she had transferred $10,000 to the complainant’s bank account. Shortly afterwards the student was deported.

The phone company insisted that the complainant was liable for the whole bill and she reluctantly entered into a payment arrangement, believing that the lodger’s family would reimburse her. When she realised that the family would not pay for the disputed calls, she ceased making payments and was credit defaulted. The phone company offered to reduce the debt to about $8,000. The complainant rejected this outcome.

TIO response

The TIO formally investigated the complaint and asked the phone company to respond to the complainant’s argument that it should have notified her that her account was higher than normal and taken action to limit the charges.

The outcome

The phone company said it had sent several letters to the complainant and had left three phone messages advising her that there were higher than normal charges on her account. As she was in hospital, she did not receive this information.

A note on the phone company’s system indicated that, two months before the bill was issued, it intended restricting the service to local calls only due to the high usage. An error was made and the service was not restricted.

The phone company agreed to remove charges of $7,600 incurred after the date on which its system indicated the service should be restricted. It also removed the credit default. The complainant had previously made payments of $400 and agreed to pay the balance of $566.

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