Getting Your Kids a Cell Phone – Traps for Young Players

So your 10-16 year old is pestering you for their first Cell Phone, or Mobile as we call them in Australia? Here are a few tips to help you avoid the pitfalls of giving a child that age access to an open line of credit.

In my fifteen years in the telecommunications industry, I’ve seen a lot of pain inflicted on unsuspecting parents who believed they were doing the right thing by giving their kids a cell phone.

There are two main causes of parental anxiety with these things.
• Bullying and theft of the phones, and
• Financial Haemorrhaging due to bill shock

Bullying & Theft

Depending on which end of the age group your child is in, there can be a lot of peer group pressure to have the latest and greatest devices. There will always be kids who want the best stuff, but can’t get it themselves, so will take it from others.

Avoid this happening to your child by setting very clear ground rules around where and when the phone can be used. Be mindful of who is around when the phone comes out and ALWAYS ensure the phone is safely secured. Don’t leave it in an unattended schoolbag.

You can also help resist the temptation of the thieves and bullies by not going for the high-end models. Whilst everyone loves an iPhone, or a Samsung Galaxy or whatever device happens to be the “must have” device of the moment, does a 12 year old really need one? Will they use the full capabilities of the phone? Probably not, so why not settle on something inexpensive that will suit their needs? Sure they might not have the coolest phone in class, but they will also have a better chance of it not being stolen.

Bill Shock

This is the real killer. In my time working in a call centre dealing with everything from basic billing enquiries to escalated complaints, I have seen some really horrendous bills. There are parents who have had to take out small personal loans because of their child’s use of a mobile phone. A conversation with a customer in that situation is not very pleasant for an operator, so I can only imagine how stressful it must be for the parent.

There are three main causes of bill shock, the first, and probably most common in recent times, is data usage. A device like the Apple iPhone and phones with the Android operating system, such as newer HTC, Samsung, Nokia and Sony Ericsson models will provide a fantastic mobile internet experience for a user, but they can be very hungry on their data consumption. If your child is using one of these phones, it is imperative that you have an adequate data allowance in your rate plan. Failure to do so can cause significant financial pain, as casual data rates can be extremely high

The second cause of bill shock has been reduced somewhat by more stringent regulations, but it’s still right up there. Premium Content Services, also known as M-Commerce or Premium TXT. These are usually the subscription style games, quizzes and ringtone services you see advertised in magazines and on TV. Tread carefully with these as they will offer something free like a game or ringtone, or will offer a chance at fantastic prize by answering an obviously easy question, but the devil is in the detail. The fine print, which is often hard to read in the advertising, and all too easily dismissed when you receive the confirmation messages, is that you are generally signing up to an ongoing subscription service that will result in receiving several of these messages weekly at a cost of $5 each. Kids in this age group will often believe they are doing the right thing by deleting these messages without opening them, however you’re charged as soon as they’re received – open or not.

The tightening of the regulations around these types of services has meant that there is some more protection and awareness for the consumer in these instances. The subscriptions are generally “double opt-in” which means you have to actually proactively do something twice to initiate the subscription. The content providers are also obliged to send you an uncharged message alerting you each time you hit a multiple of $30 – i.e. if you spend $60 you will have received two spend notifications, if you spend $90 you will have received three and so forth. Finally mobile service providers in Australia are now required to provide customers with an option to block these types of services. If you’re concerned about them, call your network provider and ask them to block it, of course if you do this, it means no more voting via SMS for the likes of Australian Idol and Dancing with the Stars.

The third cause, and most difficult to prevent, is the inability of teenagers to just stay off the phone. I have seen bills with thousands of SMS messages sent in a single month, which has amazed parents who just cannot believe their kids could spend so much time on the phone. I would not want to engage some of these youngsters in a thumb-wrestling contest that’s for sure. Service providers are doing what they can to provide self-service options to monitor your usage both online and from the handset, as well as producing better rate plans with enough included value to cover most user types. The onus, however, is on the owner of the account, who is financially responsible for it, to ensure that the user is on the right plan. Just because a $19 plan is the cheapest in terms of minimum cost, doesn’t mean it’s the cheapest option for your child’s level of usage.

What about Prepaid?

For children in this age bracket, and in a lot of cases adults too the best option for controlling the costs of a mobile phone service is to go prepaid. The handsets are often lower cost (some starting as low as $50 for very basic models) which minimises the appeal to would be thieves, and you can’t exceed your budget. Once you’ve spent your credit, that’s it. You can only receive calls and messages. When you really think about it, a mobile phone service on a monthly account is an open line of credit. You can just keep spending and spending until everything resets itself at the end of the billing month. Would you give your credit card to your 15 year old to utilise, as they liked? I know I certainly wouldn’t. Giving a child or teenager a phone on a plan or contract is just like doing the same thing.

But what if I my child is out of credit in an emergency situation? Dialing 112 from any mobile phone regardless of whether you have credit, can contact emergency services without cost. If you need to be contactable, most providers will offer deals whereby calls to numbers on the same network are free, so you can make provisions here as well.

I have seen mobile phone debts incurred by children impact many credit files so if your child needs a mobile phone service for safety and convenience, then I strongly recommend a prepaid service. After all, it’s YOU that will be responsible for the bill if the account is in your name. It doesn’t matter who is using the phone.

** This article has been previously posted by me on other sites including Redgage.