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.


Comments

    Hrmm.. interesting...

    What I find the most interesting about this article is the tone that this is something you should have expected all along with the suggestion that you shouldn't bother the government with your whingy little problems.

    Kogan are clearly making up the rules as they go along. They've given people a service agreement and then when it is no longer agreeable to them, they are using some "excessive use" clause at the drop of a hat.

    This is going to the ACCC, you can bet your bottom dollar Angus.. whether they choose to do anything is up to them. Your message of complacency doesn't sit right with me and even suggests some level of bias, which I find hard to believe because of who you are..

    Again.. it's just the tone of the article I dislike.. nothing personal.

      That undertone of a threatening and bullying entity is a trait well symbolised by Australians as a nation - look at our government!

      How many of us have been bullied by banksters (Max Keiser's term) when we complained about staff who put in a loan application without telling us?

      Most answers received by the public in the ABC's Q & A would make 5 year olds laugh if not cry.

      Kogan the Bogan's merely carrying on a tradition we support as a nation in Oz.

      Sad!

    How many people here think that wireless is the way forward if 6gig won't do for a mobile for one month? When buying a mobile plan (or prepaid) you have to work out the cost per byte when comparing. The price of data over 3g/4g LTE won't be coming down any time soon.
    Help us obiconroynobi, your our only hope!

    ... Unsure how they can be using too much data on a fixed limit plan.. If it shaped them down and people were still streaming data 24/7 then go for it..

    We are also hearing from low end users as well, who are getting booted from Kogan Mobile, so it is not just heavy users at all, it is so disgusting,

    Had a similar thing happen to my son when i put his on the Amaysim "unlimited" plan .... we got emails warning that it would be terminated if the high usage continued ... he was making 90 minute calls to his GF :/ Unlimited ...my arse

    Others have said they understand 'reasonable' use for calls, but the term used is 'Unlimited' and that's what it means. Don't promote something as unlimited and put limits on it!

    It's got to be some form of stunt. They've quietly put 400MB per day on their page without telling anyone and then they drop people. The 400MB isn't even metered for the user so they have no way of knowing until they've gone over. It doesn't cut them off, it doesn't slow down and no warnings. Kogan just stops them from recharging which means they're without a phone connection.

    To me it looks like they're trying to get as many people to sign up so it looks like they're doing well and then drops people.

    Also, I remember Kogan saying that it was meant to be clear to the customer compared to other networks. So why doesn't it have 400MB per day only instead of confusing it with 6GB a month.

    Last edited 19/03/13 9:04 am

    i think they are going to lose most of their customer base by doing this its most tech savy ppl who will seek out and go with this plan especially for the data usage. kicking these customers for using 7% at once is just so unreasonable if it was like 2GB in a chunk it would be more reasonable but 400mb is just stupid!! lets rage at them and time for change.org

    just found out about this cap today kogan has definetly messed up i already called uup and ported my number over to boost that cap shit is stupid i paid for the data and should be able to use it as fast or slow as i like.
    kogan enjor the loss of customers. ill never recommend kogan EVER AGAIN!!!!!!

    I'm just wondering why the hell I wasn't told, a day, a week, whatever before being denied service (a non-descript account status error on the website that said nothing of my evils - of course I'm going to call up) that I was actually doing something wrong so I could sort out a new service is beyond me!?
    I've willingly called the Bogan call centre and was actually told I should just look elsewhere for a new cellular provider!!! Apparently I'd broken some rules and wiping my a$$ with their shape-shifting fair use policy. OMG I so can't believe you just said that!!! I asked to talk to a supervisor but she was in a meeting and of course never called me back. Spoke to a new customer service rep the next day and was told that this mysterious (and make believe) supervisor; Carmen, was in a meeting and would most certainly call me back. I'm not an idiot, I know I'm just being put on hold for theatre. Or, for the benefit of the doubt, there is actually a Carmen. Maybe even a few hundred. Stuck in a vending machine waiting to step up as a supervisor because the last one did something about a customer complaint. Life must suck in the third world.
    Well. I'm going to give ALDI mobile a try now because the Kogan international add on was rubbish anyway!
    At the end of the day I got a cheap three months out of Kogan. I got in before the rush so it wasn't a huge screw around for a sim and connection. My biggest beef with them is why I was booted. I undeservedly used ALL or MY 6 PAID-FOR gigabytes every month. I barely even called or texted. I mean I'm living on scraps here. 6GB a month?!? C'mon.

    Got avicted by Kogan today for using my data allowance at my own convenience lol...I'm disgusted and in disbelief of such an action by these tools...no one was willing to speak to me or explain the situation except "you may deport ur number else where" spent 8 hrs on the ph requesting to speak with a supervisor no luck they just kept avoiding me..bunch of moronic idiots they made me sick to my stomach ...never had an issue with any other provider whatsoever!!...you should be a shame of your selfs!... this is appalling!!!... i urge everyone to deactivate their accounts with them and get a decent provider.

    A damn disgrace is this excessive use does this make me a business user??
    My March usage.
    396 minutes average 12.77 mins per day
    83 sms average 2.677
    26 mms average .83
    Total of 111 calls
    Took a screen shot with -1 day remaining it said still 3556mb remaining, however when added up from actual bill usage it was 4314.08mb
    50 dialled numbers.
    29 days less than 10 calls
    7 days no calls.
    24 days 5 calls or less.
    So does this make me a business user???
    What have others used to have them struck off?
    Its rude they don't give you an explanation other than we consider you a business user and leave you without service, too bad if you had an important call with ?? your career at stake and no access to another phone.
    If these people want to do this they should be made to contact the customer and give them time to make other arrangements its just not that easy with work and family commitments let alone if you order from another provider online who knows how long it would take to get a sim in the mail, then hope the porting goes well.

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