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When Is "Unlimited" Limited? On Kogan Mobile

By Oonagh Reidy | Wednesday | 20/03/2013

Kogan Mobile cops serious flack over cut offs

Kogan's mobile business is getting an earful...from its customers, some who have been cut off from the service after apparently overusing its "unlimited" phone plans on calls, texts and data.

Melbourne based e-tailer owned by entrepreneur Ruslan Kogan, spruiked the "unlimited" mobile plans launched in late 2012, as the best value in OZ.

 "No more running out of credit mid-month, no more complicated fine print tricking you into paying more," Kogan said.

"We've all been slammed with a three digit phone bill at least once, or have gone over our data allowance, only to be charged ridiculous fees for just a few extra megabytes."

But now it appears Kogan, who promised "unlimited" calls on its mobile service which uses part of Telstra's network, has been cutting off customers who have been taking the "unlimited" promise literally.

Reports also suggest Kogan wrote to customers, claiming they were cut off as they had misused the service by using it for business purposes instead of as a consumer.

Kogan Mobile, believed to have around 100,000 customers,  offers 30-day deals at $29, $79 (90 days), and a full year for $299, promising unlimited phone calls, SMS and MMS messaging and 6 GB of data per month.

But Kogan's bargain (and data) hungry customers are now far from happy, as those who use over a certain amount of have been cut off from the mobile service - without warning.

There appears to be a limit of 400MB usage per day, according to bloggers on Whirlpool forum, which has pages of pages of gripes on Kogan Mobile. One customer used up 6GB data in under 20 days.

This seemingly new limit of 400MB has "only been there for the last few days. It's not in the T&Cs" one Whirlpool user noted. 

As one Kogan customer put it:

"When ppl see this deal with KM they think 'wow, I can get 6GB a month &, can call nationally, whenever I want! All on the next g network'. They then signup & get a surprise... KM really need to put in bold print under their advertisements of plans 'Conditions apply...' "

Last month, Kogan denied it was limiting its "unlimited" plans on Whirlpool: saying: "Yes, they are [unlimited]. Unlimited means unlimited. We understand that if you're throwing the world's best party that you will need to send hundreds of messages in a day to invite everyone." 

Kogan also confirmed "a small number of users (less than 0.1% of all active users) are suspended for alleged breaches of the Acceptable Use Policy. Unfortunately, some users were suspended in error." We advise that a number of factors are considered - reasonableness is not based on a simple set of daily usage limits.

Kogan Mobile promised to notify any users who are suspected of approaching unreasonable limits, prior to cutting them off.

Another customer asked why "Ruslan Kogan can't just be honest and have the Gonads to admit that this is a right royal stuff up, and stop blaming everyone else for kogans incompetence..."

Another wrote: "Wow I am now really annoyed with myself for signing up with this fraudulent mob.Didn't know anything about this 400mb daily limit and booting off the network crap until yesterday"

Kogan T& C state:

'We may at any time in our sole discretion suspend any Service, without incurring any liability or prejudicing any of our other rights or remedies, for whatever reason, including: a) where we suspect that your account has been hacked ... o rb) where we suspect that you have breached the Acceptable Use"Policy

A spokesperson for the Australian Communications and Media Authority, who is responsible for ensuring telcos abide by  the new telecommunication consumer protection code (TCP) confirmed to SmartHouse it does regular audits to make sure all telcos are abiding by regulations, but said "we cant say whether we are going to investigate [Kogan]."

However, the spokesperson did say from 01 March all telcos are required to have a 2 page critical information summary "so consumers can compare like with like"  across different telco plans.

If a telco like Kogan was found in breach of the TCP code, the ACMA could issue a direction to compliance, take them to court and impose a fine up to $250,000,

The new industry code aims to give long-suffering telco customers protection from issues such as bill shock, confusing mobile plans and poor complaints-handling and forces telcos to make plans super clear in ads.

Interestingly, since Aussie telcos are now required to handle customer complaints efficiently, something Kogan is also failing to do, if Whirpool posts are anything to go by.

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