Charlotte lost her job during the pandemic and asked SmileTel for help

The issue

Charlotte lost her job due to the COVID-19 pandemic. She moved back in with her parents to save money. She was unable to pay her mobile phone bill and struggled to pay her other bills. She told SmileTel and asked for help. SmileTel extended the due dates for her bills.

A few months later, SmileTel disconnected her service and charged her $1,200 in termination fees. It then listed a default on her credit file and sold the debt to a debt collection agency.

Charlotte found a new job and made a payment arrangement with the debt collector. Charlotte made these payments but SmileTel demanded additional payment and refused to reconnect the mobile service.

The investigation

We asked SmileTel to show how it shared its financial hardship policy with Charlotte and what steps it had taken with her when it decided to disconnect the mobile service. SmileTel said she did not apply for financial hardship under its policy and its credit management practices were automated, so while it extended the due date for the bills, it did not stop the automated processes.

We asked SmileTel for copies of its account records and the notifications it sent to Charlotte. The documents showed us Charlotte had contacted SmileTel several times and talked about her financial hardship. They also showed SmileTel did not tell her about its financial hardship policy and did not update her residential postal address.

The outcomes

In a Fair and Reasonable Assessment, we found Charlotte would likely have applied for help with financial hardship if she knew about SmileTel’s policy. We recommended SmileTel buy back the debt, remove the default listing, waive the balance and reconnect Charlotte’s mobile service.

SmileTel and Charlotte accepted the assessment.

*Names of individuals, organisations and companies have been changed.