Kogan Mobile Dumping High-Usage Customers

With the offer of unlimited Australians calls and texts and 6GB of data on a Telstra network for $29 a month, Kogan Mobile has been a popular prepaid choice since its launch last December. But like most unlimited plans, the company’s acceptable usage policy (AUP) allows it to ditch customers whose usage is deemed “unreasonable”, and it seems Kogan Mobile is actively pursuing that policy and getting rid of some high-volume users.

A Lifehacker reader contacted us to share his recent experience with Kogan Mobile:

I spent the day watching programming and CS videos between browsing the web and happened to use about 800MB in a day. Once my data had run out and when I went to top up I was confronted with a message saying “Error: Service status is not valid”. After filing a support ticket, I learned that this means my service has been terminated as they believe I am not using the service for “personal use”.

The form email sent by Kogan Mobile reads as follows:

We have further investigated your account and you will need to churn your services to a new provider as we believe you are not using the service for personal use and we are no longer able to provide you services. Your service will not be terminated and you will have 90 days after expiry before your number goes into a passive status so you will need to churn out your number before this time.

Threads at Whirlpool suggest that some other customers are having similar experiences as a result of making large numbers of phone calls. The question of what constitutes ‘too many’ calls is harder to judge than data usage, which has a fixed limit, but the end result is the same: customers are told to go elsewhere.

Let me say this up front: while understandably infuriating, this is neither surprising nor spectacularly unfair, and shouldn’t be a shock to anyone who read the terms and conditions before signing up. As our original story noted, Kogan reserves the right to vary its terms on 14 day notice (and doesn’t allow top ups for data between usage periods), so there was always the potential for some users to be unhappy. In this instance, the terms don’t actually seem to have changed but the unhappiness has definitely kicked in.

This isn’t an unusual scenario, or indeed one specific to Kogan. Any company offering an ‘unlimited’ service is relying on the fact that the vast majority of customers will not use anywhere near the maximum amount (and indeed might not use enough to justify the price tag attached to the “unlimited” offer, though in this case that price tag is very low). Customers who end up costing the business more than they pay are always liable to get the boot.

While the standard communication from Kogan Mobile quoted suggests that the user appears to be operating a business, the terms themselves make it clear that the policy can be varied or applied for any reason whatsoever: “We may give or withhold our consent, or make our consent subject to conditions, at our discretion.”

The AUP specifically notes the Kogan Mobile service can’t use it for a business or a ‘permanent connection’, which blocks using it as your sole source of broadband. It also specifies that “downloading gigabytes of data in a short period” might be deemed unacceptable behaviour. That’s not especially friendly to people watching HD video, but it’s a clearly-stated term. Those kinds of terms would put me right off signing up in the first place, but that’s why I always read T&Cs carefully, and why you should too.

Can you complain to the ACCC or the TIO about it? The ACCC doesn’t take too kindly to the word ‘unlimited’ being bandied about by providers, and has taken Dodo, TPG and Optus to court in the past for broadband plans using that phrase. One crucial difference though: those deals all involved long-term contracts, not prepaid deals. That doesn’t necessarily mean that the ACCC might not see the word ‘unlimited’ as misleading, but it does make direct comparisons with the previous cases less informative.

There’s no lock-in with Kogan, and customers who exceed the limits are simply being asked to leave, which makes TIO involvement unlikely: what precisely would you want the TIO to do? Having used the 6GB of data, it’s not obvious (to me) what other compensation might be appropriate.

And it’s not like Kogan is the only choice. There are plenty of other prepaid providers to consider, including Aldi and Boost on the Telstra network, Red Bull on Vodafone, and Amaysim, Live Connected, TPG, Virgin and others on Optus.

Unlimited prepaid has a clear upside — no lock-in — but that also makes it harder to argue you’re getting rorted if the provider chooses not to renew your offer. Refusing to let a customer pay for more service might seem an odd business practice, but if it annoys you, the sensible choice is to go elsewhere — and always read the AUP carefully when you do.

Had similar experiences with Kogan Mobile or other providers? Tell us in the comments.

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