Photograph: Istockphoto

The secret to a long and happy life may not be enlightenment, seeing your grandchildren grow up, or a magic elixir. The secret to a long and happy life may lie in the simple avoidance of cellphone contracts - at least if the anguish, frustration and rage that pours from the complainants to hellopeter.com is anything to go by.

Hellopeter.com is a website that enables consumers to report their good and bad experiences, and a search shows there are a large number of unhappy cellphone users out there.

“R29 HAS BEEN DEDUCTED FROM MY ACCOUNT AND I WANT IT BACK. YOU HAVE UNTIL FRIDAY AT 12PM TO RETURN MY MONEY,” one person shouted in digital desperation at his cellphone service provider.

On a rough count over the period of a week, about 120 consumers contacted the website every working day about cellphone service providers. Few of those were to send compliments, and no company escapes the blast.

The complaints arise from a number of general (and to a certain extent inter-related) categories:

1. Bad service by cellphone company and call centre staff, which is the biggest source of complaints.

2. Some clients do not understand or have been misinformed about the packages they have chosen.

3. Some clients did not read their contracts carefully before signing and are unaware of what rights cellphone companies have – such as the right to take money from their bank accounts.

4. Charges that are apparent only if you scrutinise your cellphone account and perhaps also your bank account.

5. Unexpected costs, such as the incredibly high bills that can arise from international roaming. These usually result from a lack of knowledge.

6. What looks like a rip-off but may have a more mundane explanation.

It is with the categories four, five and six – charges that are difficult to detect, unexpected costs, and costs that may or may not be a rip-off – that Personal Finance has done a little digging.

First, let’s deal with some terminology.

Cellphone networks are provided by network operators MTN, Vodacom, Cell C and newcomer Heita (Telkom’s cellular division).

If you have a cellphone contract, your link to your chosen network is through your service provider: MTN Service Provider (MTN SP), Vodacom SP, Nashua Mobile and Altech Autopage, to name some of the more prominent.

Alternatively, you might have elected to join Virgin Mobile, the only mobile virtual network operator (MVNO) in South Africa at present (although more are expected to be launched in coming years).

An MVNO does not have its own network, preferring to leverage the network(s) of physical network operators.

And it differs from service providers in that it offers its own products and services rather than on-selling the products and services of the underlying physical network operator.

If you have a problem with your billing, your first port of call is your service provider or MVNO. (For simplicity, the term “service providers” includes Virgin Mobile for the rest of the article.)

Prepaid cellphone users don’t have a service provider and should go direct to their network operator with their complaints – although this article does not deal with prepaid costs.

Heita had just been launched at the time this article was written and had only prepaid products on offer. As a result, Heita was not approached for comment, although when it starts offering contracts, the chances are that its clients will find the information below applicable.

International roaming

The indiscriminate use of cellphones and data cards when travelling outside South Africa can result in a really hefty bill.

Some people have returned from abroad to bills amounting to tens of thousands of rands after downloading a couple of emails with attachments, browsing the internet, and sending a few video clips or photos back home.

Your cellphone’s ability to send photos to Johannesburg when you are standing in New York or New Delhi is because of international roaming – “the extension of connectivity service in a location that is different from the home location where the service was registered”, as Wikipedia puts it.

The tendency of smartphones to constantly search for email updates increases your risk of running up a huge bill, Duncan McLeod, the editor of website TechCentral, says in an article on the website.

McLeod writes that MTN “warns in the small print on its website that smartphone users must disable all data features before they travel abroad”.

He quotes MTN as saying: “Failing to do so will result in you being charged the minimum billing increment [of R2.70 per 25KB in Europe] each time your device connects to the mail server, even if no new mail is sent or received.”

Tim Walter, the general manager for product and marketing at Nashua Mobile, suggests that you research voice and data roaming costs at your destinations. This information is available from the websites of most network operators and service providers.

Once you are outside South Africa, Walter suggests that you keep a careful track of how much time you spend making phone calls and how much data you consume. Downloading a large email with an attachment could cost you hundreds of rands, he says.

McLeod points out that MTN subscribers roaming in Europe pay about R110 per megabyte (MB).

Vodacom, he says, charges its subscribers in smaller increments than MTN at 10KB and roaming rates in Europe are R128 per MB.

He says Cell C's billing increment varies and its rates also vary by country, but its data roaming rates are roughly in line with the fees charged by the other two operators.

Walter offers the following advice:

* Set your phone to roam on the network that offers the best rates.

* If you frequently travel abroad, invest in a Wi-Fi enabled cellphone and/or a Wi-Fi card for your notebook. Wi-Fi is usually cheap compared with using a cellular connection while roaming.

* Consider buying a prepaid SIM card at your destination to take advantage of the local call tariffs within the country you are visiting.

* If you must download or transmit data, minimise the size of the file as much as possible because data is charged by the kilobyte rather than by the second or minute. A phone call or SMS may be cheaper than an email.

Suspensions

Some consumers report that their accounts have been suspended because the outstanding monthly payment was not received.

But when the consumers investigated, their banks told them there had been no attempt to debit their account or, in a slightly different scenario, there had been no rejected debit orders against the account.

You, as the consumer, may understandably think you are being ripped off because you may incur costs when your service is suspended and if you are late in paying your account.

Not all the cellphone companies charge all the fees but, depending on the circumstances, you may incur:

* A reversal of suspension, a re-activation fee or a reconnection fee;

* Interest on overdue accounts; and/or

* A reversal fee on a returned debit order.

However, a situation in which it appears that the service provider did not try to get the money from you but suspended your service anyway may not be a rip-off so much as run-of-the-mill human error.

If your bank account details are recorded incorrectly by your cellphone service provider, your monthly payment will not go through correctly – and it won’t register on your account as an attempt to get payment or as a rejected debit order. This “failure to pay” can also happen if you neglect to tell your service provider promptly if your bank account details change or if you get a new credit card or debit card.

Other customers complain that debit orders go off earlier than arranged if the agreed payment day falls on a weekend or public holiday. As a result, there are not enough funds in the account to cover the payment, resulting in a suspension of the cellphone service. How does this accusation hold up under scrutiny?

Nashua and Vodacom say they submit the debit order on the next working day.

Virgin Mobile says that if the agreed payment date falls on a Saturday it will submit the debit order on the Saturday; if the agreed payment date falls on a Sunday, the debit order will be submitted on the working day before – that is, on the Saturday. The same applies to a public holiday, because it is common practice among companies to pay staff in this way.

Altech Autopage Cellular deducts payments earlier only when the client’s debit order is due on the last working day of the month and that day falls on a Saturday, Sunday or public holiday. In this instance, the money is deducted on the Friday before, Wandy Masilela, the marketing supervisor of Altech Autopage, says.

“Should the client’s debit order date fall elsewhere in the month, then the money is deducted on the next applicable working day,” he says.

The other cellphone service providers did not say what their practice was.

The Big Four retail banks – Nedbank, Absa, Standard Bank and First National Bank – say they process debit orders in line with the transaction dates provided by the service providers.

But Nedbank acknowledges that more awareness about the use of debit orders is needed. Carmen Whateley, the executive of funding and payments at Nedbank, says: “We will be embarking on a consumer education drive to achieve this.”

Nedbank will be informing clients about its Early Debit Order system and how this facility reduces the risk of processing a payment instruction against a consumer’s account if there are insufficient funds in the account, Whateley says.

You are charged for a service you have explicitly said you do not want

Many contracts require value-added services, such as itemised billing, for the duration of the contract, and this is not optional. But once the initial period of the contract has expired (after the first 24 months) you may be able to drop the service.

Vinnie Santu, Cell C’s media liaison officer, says: “Itemised billing is considered as part of the package at inception of the contract. Such a service is only mandatory for the duration of the contract, at which point it may be terminated, usually at the end of the 24 months.”

Eddie Moyce, the customer relationship executive at MTN SA, says it is up to you to go back to your service provider to cancel the service.

“MTN will load value-added services when the new subscriber signs up for the service, or on the customer’s request. If the product/service is not mandatory and is no longer needed, MTN will deactivate this on request. If the request is not carried out in time, and an unwanted product/service is billed, MTN will credit the client accordingly,” Moyce says.

You are charged for a service that you consider useless

This is different from being obliged to take out a value-added service as part of your contract. This scenario refers to a service such as itemised billing and caller identification on a data bundle.

As Jennifer Stern puts it in her article “The padded cell”, paying for itemised billing on a data contract allows her to know that all her 3G connections are to her internet service provider. And being charged a caller line identification means that her internet service provider is able to identify her – as if it needed caller ID to do so! However, MTN casts some light on this.

“Itemised billing on data lines is frequently requested so that the subscriber can verify session times and units consumed. Each subscriber is given a choice whether to have the service or not. The same applies to caller ID, as many clients use data SIM cards to send SMSs, which requires caller ID to be active,” Moyce says.

So it would be worth your while to check whether you are paying for services you do not need.

Virgin Mobile does not yet offer modems or data bundles, Jonathan Newman, its head of strategy and marketing, says.

Virgin Mobile subscribers “can use their airtime value for data or voice without having to buy a separate data bundle,” he says. This flexibility helps it avoid the data-related problems that consumers encounter, such as the example just quoted.

You pay for a one-off data bundle and the technical department reloads the bundle the next month as well. It can go on month after month in the worst-case scenario

Altech Autopage’s Masilela acknowledges there are occasions when a client requests an ad-hoc or one-off bundle, only to be repeatedly charged.

“Due to that factor known as ‘human error’, there are times when a bundle is accidentally loaded as a permanent subscription. Once we have looked into the issue, we will gladly refund the client,” he says. The onus is you, the customer, to identify that this repeat billing is occurring.

However, Nashua Mobile does run checks on its systems.

“One-off bundles are valid for 30 days from the date requested by the customer and should automatically be removed from the account,” Walter says.

“We run constant checks to ensure that our systems follow this rule. Should a customer be billed more than once for a service, the service is immediately terminated and the account credited,” he says.

Data bundles are loaded onto your account and then ‘disappear’ in a few days

MTN SP says that “very infrequently” data does disappear as a result of a billing problem.

“There are instances where the Eppix [billing] system removes a bundle,” Moyce says. “It happens rarely but if MTN picks this up, we’ll rectify the error and reimburse the client.”

The consensus among the service providers is that it is much more likely to be a fault of your computer or smartphone gobbling up data without your being aware of it.

Walter explains: “Unexpectedly high data usage is sometimes caused by automatic updates of anti-virus software, operating systems and internet-based applications installed on laptops and personal computers. Malicious spyware embedded in websites, email attachments and software downloaded from the internet can also consume data rapidly.”

Vodacom’s spokesman agrees, and offers this advice: “The customer”s devices could have automatic updates set as default and without realising these programs run in the background using data.

“Customers should always ensure that their internet browser is off when not in use.”

Costs spiral out of control

Daniyel from Johannesburg claimed on hellopeter.com that he was “overbilled by R10 000”. He said on the site: “Data usage [costs] spiral out of control, yet we are using roughly the same amount of data every month.”

Without looking at the specifics of Daniyel’s case, the factors seem similar to those behind the previous scenario of data bundles disappearing. Although service providers say the majority of cases can be explained in this way, there are a few instances where the billing problem can originate with the service provider. MTN points to the billing duplications it experienced in the fourth quarter of 2009.

And Walter says one of Nashua’s operator partners had billing issues earlier in 2010 “due to technical problems with its billing system, and some of our customers were overcharged for data usage as a result”.

Both MTN and Nashua say the problems have been corrected and the customers reimbursed.

Users of iPhones and other smartphones need to check whether they are set to automatically connect to the internet and to download data.

“Most smartphones run operating systems like computers. This software has options to auto-update, or to synchronise,” MTN says. “If these options are activated, the handset will auto-connect and the data transfer will draw chargeable data. This is user controlled and the customer can simply change or disable those settings.”

Softlocks and guaranteed limits are one way to try to rein in spending on data usage and phone calls.

Walter explains that once a user reaches the spending threshold for the month, the softlock kicks in and will allow him or her to receive calls and text messages but to make only emergency calls. But you cannot rely totally on these to cap your spending, as many customers have found to their distress and anger.

There is no guarantee that limits requested on cellphone accounts will be adhered to

“Softlocks are designed to ensure that postpaid customers do not exceed their maximum level of affordability for a service. However, it must be remembered that a softlock is effectively just an advisory service to warn the client that their usage has reached a certain level,” Masilela says.

None of the service providers is able to guarantee that it will be able to implement any limit you request. You will still be liable for any charges you incur in excess of the limit you request.

“A monthly limit or threshold can never be guaranteed, so it imperative for customers to be aware of this,” Cell C's Santu says.

Virgin Mobile does not offer softlocks, but says all its postpaid and top-up customers have a talk limit.

“Once this limit is reached, customers can’t make any other calls and/or data downloads until they top up their account. For example: on a Classic contract package that gives you a R100 airtime, there would be a facility allowing for a R600 talk limit. Once this talk limit is reached, the customer will be notified and they can then choose to top up,” Newman says.

Most of the service providers spoken to for this article recommended the top-up option as the solution to huge bills.

If you want to monitor your account to check on your monthly usage, you can do so.

MTN subscribers can visit the MTN SP website at www.mtnsp.co.za/mtnactive or dial one of these numbers from an MTN handset: 808 or 16202 or 258.

Altech Autopage accounts can be monitored using the My Account Pro service, but you have to pay for the facility.

Walter says Nashua Mobile sends customers a text message when they have reached 80 percent of their indicated call limit value and then again at a 100 percent of their limit.

Vodacom customers can dial *111# or they can view their accounts on the website, www.vodacom4me.co.za

The other providers did not give information on how you can monitor your account.

‘Impossible’ charges

Leeann from Midrand noticed that she was charged for two calls that were each an hour long but made 20 minutes apart. Time may be relative but in this case it seems positively elastic. The calls also cost her more than R300, so her concern was not simply philosophical speculation.

Most cellphone providers were not able to comment specifically without detailed information, but two explanations emerged for this seemingly “impossible” charge.

* It could arise if you put a caller on hold and then make another call; and

* It could be the result of a conference call, where you connect two other people at different times.

So, seemingly impossible calls, such as those that overlap, may not be impossible after all.

Most of the service providers say that if they encountered such a case they would extract your call data to check its accuracy.

So, it would be worthwhile to check your bills for call patterns that raise your suspicions – such as unnaturally long calls and overlapping calls if you are not in the habit of putting people on hold. Follow through if you believe the charge is not legitimate.

DROPPED CALLS

A few years ago a company called Cell Check helped consumers claim back money from their cellular service providers.

Cell Check’s founder, Jason Blacklock, explains that if you are on a per-minute billing system, you are charged for a full minute if a call is dropped during that minute.

The majority of Blacklock’s work was to examine itemised billings for dropped calls, for a fee of 50 percent of the amount identified.

In 2006, Cell Check claimed more than R18 000 in dropped calls on behalf of a client, Hilti SA. Vodacom SP, Hilti SA’s service provider, challenged the claim; the case went to court; Cell Check lost.

“The judge ruled that (in a contract) it is not implied that they can’t charge for a whole minute if they can’t determine how the call was dropped during the minute,” Blacklock said at the time.

The term “dropped call” was defined in the judgment as a call that is terminated by some other means and not by either one of the two parties.

With the collapse of the court case, Blacklock’s cash-generating model collapsed and he closed Cell Check.

His new venture is a facility that alerts family and friends and allows your cellphone to receive your personal, medical and insurance information at the press of a key if you are involved in an accident or if you are in distress. The service’s website is at www.talk4u.co.za

HINTS AND TIPS FOR AVOIDING FRUSTRATION

There are things you can do to prevent problems arising in the first place.

Vinnie Santu, Cell C’s media liaison officer, suggests the following:

* Always ensure that you fully understand the terms of the contract you are acquiring.

* Ask questions, and continue to ask them until you are fully satisfied.

* Remember that a SIM card is like a credit card – it represents your ability to spend money or get you into debt – so watch over your SIM card carefully.

* When you sign up a service for someone else, remember they now have your “credit card” and will be spending for you.

Tim Walter, the general manager for product and marketing at Nashua Mobile, says: “Customers should check their bills every month and query any discrepancies immediately.

“They should give us specific dates for transactions they want to query. Nashua Mobile cannot query charges or transactions with the network after six months.

“Be careful and aware when using your phone. Most of the app-stores also have free applications that, once installed on a handset, allow a user to monitor their data usage in real time. Although this usage will not correlate 100 percent to your bill, it will provide a fairly reliable indication of how much data, voice and SMSs the customer is using.”

Walter says the most common billing complaints are for data downloads where the customer is unhappy with the amounts charged or disputes the amount downloaded.

“Also, international roaming charges, where customers are not educated about the high costs that can be incurred,” he says.

The most common complaint is around understanding the monthly bill, and Virgin Mobile is always looking for ways to simplify its bills, Jonathan Newman, its head of strategy and marketing, says.

Virgin Mobile educates its customers with inserts that accompany the bill. These inserts show you how to read and understand your bill – so don’t throw them in the rubbish bin as junk mail until you have read them.

You can also contact the Virgin Mobile call centre to have your bill explained in detail.

The billing process is explained to the customer at the point of sale when the contract is signed, Newman says. “But we find that, until the customer physically receives and sees their first bill, it is quite difficult for them to understand or follow what is being explained to them.”

Vodacom advises that you get all the information about the contract and your chosen option before you leave the point of sale, so that you are not surprised when you receive your bills.

“Customers are also encouraged to query anything they are not sure of on a bill within 30 days, so that we are able to access the information before it is archived, as this does make the resolution easier and quicker,” the Vodacom spokesman says.

This article was first published in the 1st quarter 2011 edition of Personal Finance magazine.