Owning a mobile phone

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Buying a new phone is a big deal. Make sure that you have all the facts about entering phone contracts, and some of the hidden charges that can apply when you buy or use your phone.

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Types of phone plans

There are a lot of choices when deciding to get a phone. The most important step is deciding is deciding how much money you can commit to getting a new phone and affording to keep it running.

You can use the tables below to decide what starting option might be best for you. Once you have decided whether to go pre-paid or post-paid and how you are going to get a handset, then you can decide how much you are probably going to spend on calls, text and data.

Once you have all this worked out then it’s best to go to a shop or online and use this information to match to the best plan available.

Your main choice is between prepaid and post-paid plans.

Within these categories, there are different options you can choose from:

  1. Use a phone that you already have with a prepaid plan
  • These are the cheapest plans available and will avoid bill shock.
  1. Buy a phone outright with a prepaid plan
  • With this option, you can keep your spending under control while using any unlocked mobile. However, buying a phone ‘outright’ (all in one go) can be a huge cost and it’s important that you have money left over for credit on your prepaid plan.  
  1. Buy a package that includes a prepaid plan and a mobile phone
  • With this option, you can get a mobile phone (paid for upfront as part of the package) if you don’t already have a phone. However, phones may be locked to the phone network for 1-2 years. If you need to use a different phone network, you may need to pay to have your phone unlocked.
  1. Use a phone that you already have with a post-paid plan
  • This is usually the cheapest option for a post-paid plan. However, if you don’t watch what you use, you could still overspend.
  1. Buy a phone outright with a post-paid plan
  • You should only consider this option if you know you can afford to pay for a new phone all in one go and have enough money to pay for your minimum monthly spend every month until your contract is over.
  1. Buy a package that includes a post-paid plan and phone
  • Although there are no upfront costs, what you pay each month can end up being very expensive, especially if you choose the latest mobile phone. This is because you will be paying for the phone over the period of your contract PLUS the cost of the services included on your plan (e.g. $200 worth of talk and text). Remember that if you choose this option you will need to commit to that amount every month until your contract is over.


  • Your phone company must ensure its bills are easy to read and contain relevant information such as
    • The billing period,
    • The due date for the billed charges and the due date for any money you haven’t paid from previous periods,
    • The name of the offer or plan you’re on and are being billed for,
    • A description of the charges included in the bill (how much you spent on text, MMS or calls); and
    • A telephone number for you to call if you have questions about your bill.
  • If you ask for it, your phone company must give you something called an itemised bill. An itemised bill will tell you how much you spent on each call, SMS or data.
Warning: on your bill, your phone company doesn’t have to tell you what your monthly allowance is. If you forget, you can find out by calling your customer service hotline.


Phone alerts from your provider

Your phone company must provide information on its website about how you can monitor and manage your call, SMS and data usage. These are called ‘usage monitoring tools’. You should also be told how up-to-date the information on your usage monitor is. Sometimes usage within Australia might take a certain number of hours to show up on your usage monitor or a couple of days if you called or texted someone overseas.

Data usage

Your mobile phone uses data each time you access the internet. Mobile services such as  maps, video streaming, video calls, opening emails with large attachments and playing graphic online multiplayer games will use a lot of your data. To reduce data use:

  • Turn off push notifications and background data for apps.
  • Remove apps you don’t use from your phone.
  • Delete unsent emails (they may try to resend themselves over and over again).
  • Turn off roaming if you are travelling overseas.
  • Use Wi-Fi whenever you can.
  • Set your phone to automatically connect to Wi-Fi (at home, office, Wi-Fi hotspots in public).
  • Disable location services.
  • Wait till you have access to Wi-Fi to download apps/games, watch movies/videos and stream music.

To find out how you can track your data usage click on Telstra’s guide, or the iTunes guide, or on the Google Play guide for Android users.

Monitoring your usage

Your phone company must provide information on its website about how you can monitor and manage your call, SMS and data usage. These are called ‘usage monitoring tools’. You should also be told how up-to-date the information on your usage monitor is. Sometimes usage within Australia might take a certain number of hours to show up on your usage monitor or a couple of days if you called or texted someone overseas. If you have a post-paid plan, your phone company must tell you by SMS or email when you reach 50%, 85% or 100% of your call, SMS or data allowance.

  • The notifications must be free and made no later than 48 hours after you reach those usage points. The notification does not include calls or SMS to overseas or usage outside Australia.
  • When you’ve used up 100% of your monthly allowance, your phone company must also tell you how much extra calls and texts will cost now that you’ve finished your allowance.

It’s important not to rely on notifications and keep track of your spending yourself. This is because the information in the text notifications can be up to 48 hours old. So when you receive an alert, you may have already gone over your monthly allowance.

Phone services

Premium SMS

A premium SMS is a special service that might deliver you with specific media content e.g. Horoscopes. They cost more than normal SMS or MMS messages and will be taken out of your credit, or added to your monthly bill. You can get premium SMS by ‘opting-in’ to the service through SMS, online or by responding to voice prompts in automated recorded messages received to your phone. These services could be one-off, or subscription based. It can be hard to cancel a Premium SMS subscription service especially if the provider is based overseas. You might need to use the data on your phone to access Premium SMS content (like a video sent via SMS). This means you will be using your data on top of paying for the Premium service.


Be aware of scams. If you weren’t asked to confirm your intention to subscribe, you may have been scammed. Scams will often mean that you receive multiple text messages which you haven’t subscribed to. They will charge you each time.  If you think you’ve been scammed, keep the message and report it to the Australian Competition and Consumer Commission: 1300 302 502 or www.accc.gov.au.


You can cancel your subscription at ANY time (and you should not have to pay any early termination fees). Just SMS the word ‘STOP’ to the ‘19’ number you originally subscribed to. You should receive confirmation from the Premium Service provider that the service has been cancelled. If you keep receiving messages, contact the customer service line to make sure they got your request to cancel. If you need further help, you should contact the Premium SMS provider’s Customer helpline displayed on the ad, or by looking it up at here.

If you have tried fixing the problem yourself, but haven’t been able to, you can make a complaint to the ‘Telecommunications Industry Ombudsman.’ You can call them on 1800 062 058.

Making in-app purchases

In-App purchases are items and/or upgrades that you can buy within mobile phone apps e.g. extra features or content in games, for example character upgrades or boosters, tokens, coins or extra points. In-App purchases are quick and easy because the App is often linked straight to your iTunes account or credit card. For Apple devices: if it has been less than 15 minutes since your last In-App purchase, you don’t have to re-enter your account password. This means you could make purchases by accident much more easily.

If you have an Apple device tap the following: Settings > General > Restrictions > Enable Restrictions > In-App Purchases > Off. If you have an Android device, purchases can be restricted with a PIN number by opening the ‘Google Play Store’ app and tapping the following: Menu > Settings > User Controls > Set or Change Pin.

There are three types of In-App purchases:

  • Non-replenishable – you only need to buy it once and it can be transferred to multiple devices with the same iTunes account e.g. bonus game levels
  • Replenishable – these need to be purchased each time e.g. extra experience points, boosters, virtual currency
  • Subscriptions – these are services you buy once but will only last until their expiry date (you can find the expiry date of your subscription on the app description).

If you believe you have been misled into making an In-App Purchase you can lodge a consumer complaint with the Australian Competition and Consumer Commission (ACCC) here.

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