Unlawful and predatory behaviour by mobile phone carriers is rife in remote Australian communities, according to academics and financial counsellors.

They say Indigenous people in communities in Queensland, South Australia and the Northern Territory where English is a second language are the worst hit.

The ABC understands one homeless woman was sold concurrent two-year mobile phone contracts, while welfare recipients are commonly encouraged to set up direct debits from Centrelink payments.

Customers often cave in to relentless telemarketing and enter contracts without understanding the costs.

Sweeteners such as plasma televisions, laptops or games consoles are promised for both advance payments and referrals of family and friends.

Heron Loban, an academic from James Cook University, conducted a research study on the phenomena.

"Aboriginal and Torres Straight Islander people are specifically targeted by telcos, particularly [those] living in remote communities, because of their vulnerabilities,'' she said.

"They do that knowingly and deliberately.

"In some contexts the conduct is illegal... it amounts to unconscionable conduct, misleading or deceptive conduct where false representations are made.

"They have been found to be quite dishonest in those dealings by the ACCC (Australian Competition and Consumer Commission) and by the Federal Court."

The ACCC has fined and is again investigating one telecommunication company, VIPtel, which sold hundreds of mobile phone contracts to people in areas where they knew there was no network coverage.

Easy targets

But financial counsellors in remote areas claim as soon as one unscrupulous operator is brought to account, another takes its place.

"They seem to have realised that Indigenous communities are an easy target," said Indigenous Consumer Assistance Network financial counsellor Carmen Daniels.

"This is not just one company - there are heaps of little mobile phone companies doing this.

"We know some companies would take out the whole of their Centrelink payment on the day that they received the benefit because they agreed verbally to direct debits over the phone.

"Often clients have not been able to speak up for themselves or have a real understanding of what happened to them, besides not getting a TV that they were promised.

"We have an office in Yarrabah... and in the population of 3,000, we have people coming to us with [up to] three [concurrent] mobile phone contracts.

"That's a lot of penetration by telcos in a small community."

For these people faulty products, services and unexpected debt is only the start of their problems. Many lose good credit ratings and are pursued by debt collectors hired by the mobile phone carriers.

The ABC has obtained one intimidating letter to a customer in Yarrabah from a debt collector suggesting the customer "buy a suit or professional dress attire ready to see us in court".

Often telemarketers cold-call customers and infiltrate the community by rewarding referrals.

Telemarketing often requires customers to only answer 'yes' or 'no' to questions to enter into the contract and questions are often designed to obtain a positive affirmation.

"The nature of their telemarketing strategy has a particular impact on Indigenous people and that's when it spreads throughout a community,'' Ms Loban said.

"There is a tendency for Aboriginal and Torres Straight Islander people to answer 'yes' to agree with someone in authority, particularly a non-Indigenous person and answer 'yes, yes, yes' to questions that are being asked.

"There must be thousands of people sitting in remote communities who have these issues but the assistance and knowledge is often not there to make the complaints."

Misleading contracts

Far north Queensland resident 'Maria' was homeless with four children when she says she was misled into agreeing to two 24-month mobile phone contracts.

At the time, she was staying at a friend's house and her sources of income were a Centrelink payment and family tax benefit.

Maria agreed to the contract because the telemarketer gave her a choice of receiving a holiday, video camera or flat screen TV if she provided the names and phone numbers of family and friends in this same telephone conversation.

Her handset stopped working not long after she received it.

"She'd called the mobile phone company to get a replacement,'' Ms Daniels explained.

"But when she called them to complain, she was entered into a second contract. So she had two 24-month contracts when she thought she only had one."

Complaints extend beyond Indigenous and remote communities and range from selling faulty mobile phones, second-hand mobiles as new, harassing customers to pay for texts and calls from phones that never worked, inaccessible services and sim cards not activated but customers are still billed.

An ACMA report in March explored the issue of informed consent by interviewing more than 100 adult participants in metropolitan and regional areas in NSW, Victoria and Queensland.

Most participants felt the process of entering into a telecommunications contract over the phone had been inappropriate and that overall, expectations were very low.

People had no power in the consent arrangement and they often felt rushed or pressured through the consent process.



Editor: Nikki Tugwell

Reporters: Nikki Tugwell, Eleanor Bell, Joel Keep