I believe that anyone with the right information can cost a user on the Virgin Mobile cellular network around $575 an hour in excess usage charges. The unlucky user might not find out that this is happening for up to two days. That’s almost $28000 in possible excess usage. This can be done using general purpose tools, available to anyone with a computer.

Although I have investigated this for Virgin, a similar statement is probably also true for Optus and may also be true for other mobile carriers in Australia.

The reason is a combination of the carrier’s pricing policies, and the open nature of the internet.

$2097 worth of internet access for just $15 a month

I’ve been using my iPhone “tethered” for internet access. I’m waiting until ADSL2+ gets installed at our new flat, and I decided to use my Virgin Mobile “1 Gigabyte” data plan tethered to my computer.

1Gb of data with Virgin Mobile costs $15 a month. If you were to use 2Gb in a month, it will cost you $2097. That’s right: the second gigabyte costs 140 times more than the first. The delay between using that data and finding out can be up to two days.

Virgin isn’t at all alone in this, although their excess charges are the most expensive I could find. Here’s a summary of some common carriers and sample data plans:

Carrier Data Plan Cost Allowance Excess Cost, 2x allowance Ratio
Virgin Mobile $15/mo 1Gb $2.04 per Mb(1) $2097 140:1
Optus $19.99/mo 1Gb $0.35 / $0.50 per Mb2 $358 / $512 18:1 / 26:1
Three $20/mo 2Gb $0.10 per Mb $205 10:1
Vodafone $4.95/mo3 200Mb $0.12 per Mb $24 4.8:1
Telstra $59/mo 1Gb $0.25 per Mb $256 4.4:1

1 On the Virgin Mobile web site this is written as 0.2c/kb, which sounds a lot smaller than the others but is actually substantially higher.
2 The excess rate is higher if you’re a month-by-month customer instead of on a contract.
3 One year contract. Vodafone have larger data allowances built into some of their call plans. Same excess usage charge.

If you read online forums like whirlpool, you can find dozens of people reporting massive bills on various carriers, up to the thousands of dollars. In some cases, people claim that they cannot identify the cause of the excess data usage.

The Internet does not care about excess usage

Because of the nature of the internet, a third party can rack up thousands of dollars in charges on my phone. Right now.

If you’re on a Virgin Mobile connection, you have a publicly accessible IP address on the internet. The same is probably true for Optus, as they share a network. By itself, this is a good thing. It enables full access to the internet. However, it also makes it very easy for people to send you unwanted data.

For instance, the command:
$ sudo ping -i0.01 -s 1024 -c 1000 114.72.XX.XX
-- ping statistics ---
1000 packets transmitted, 431 received, 56% packet loss, time 11093ms
rtt min/avg/max/mdev = 978.635/1369.705/2952.025/440.547 ms, pipe 288

(Translated, this means: Send 1000 “Are you there?” echo requests to the internet address of my phone. Send them 100 times a second, and attach 1 kilobyte of data to each request. Ask the other end to send the data back, to prove they got it OK.)

This caused at least 868kb (probably more) worth of data to be charged to my 3G iPhone, in 11 seconds. This was on a fairly poor link (2 bars out of 5.)

868kb is $1.74 in Virgin Mobile excess charges. Charged to me, remotely, without needing my knowledge or consent. Keep doing it repeatedly, and it adds up. You can burn an entire 1Gb quota in less than four hours. From then on it’s around $575 for every hour you keep it running. Thanks to Virgin Mobile’s monitoring policy, it could be two days before anyone even notices. By then, it could be pushing $28000.

The problem isn’t the ‘ping’ command. There are dozens of other ways to send unsolicited data to an IP address: UDP packets, TCP SYN requests, not to mention any open ports on your smartphone that will actually receive data.

This kind of data usage can easily happen by accident. For instance, mistakes with tearing down data streams can easily happen. If a server keeps streaming data to you incorrectly, you’ll still pay.

The real problem is Virgin Mobile’s data charges. While they would be sensible with dial-up in 1996, they are excessive in 2010.

Other Practices

Virgin Mobile has some other practices which can make it easy for excess usage charges to rack up.

Confusing Language.

0.2c/kb can be a confusing term for non-technical people. No other Australian mobile carrier that I could find lists their excess data rate by the kilobyte.

Virgin Mobile’s advertising material explains that 1Gb a month is good “for those who always use the web”. I could not find an explanation of how 0.2c/kb compares to this quota, or an explanation of how “always using the web” too much could cost hundreds of dollars. My Mum understands “for those who always use the web.” She does not understand 0.2c/kb.

Misleading Tools

Virgin Mobiles’ broadband usage meter “may not include last 2 days usage [sic]”. With 3G download rates, you could blow an entire quota in a few short hours. So you never know exactly where you stand.

Virgin Mobile’s monitoring page also contains the following usage graph:

Virgin Mobile usage meter

In the above graph, the download quota is exhausted one third of the way across. So it could also be shown like this, although it isn’t:

Modified meter, only showing allowance

It also shows up to a theoretical 2.6Gb of downloads. Here is the same graph, with my modifications showing what it would actually cost to download all that data:

Modified meter, with dollar amounts

That’s $3,292 on the far right.

Late notifications

Virgin has a per-customer credit limit. On a current $50 plan it would be $600 . Phone access will be cut off if the customer exceeds their limit, for their own protection.

However, because of the two day delay, tens of thousands of dollars in usage can be accrued before the credit limit even kicks in. Users posting on Whirlpool suggest that, in this case, the credit limit is not the limit of a customer’s liability.

What could be done?

I have some suggestions, that would mitigate this problem.

Limit the ratio of excess charges. 140:1 seems unjustifiable to me. If necessary, the ACMA should regulate that excess charges cannot exceed 10x the base charge rate for the same service.

Better monitoring. Most ISPs have their usage meter update in a matter of hours. I would like to see a reasoned, technically informed, explanation of why a usage meter must take two days to update.

Better alerts. Internode notify me if I have used 70% of my monthly usage quota, and again if I have used 95%. I see no reason why mobile carriers should not be able to do the same.

Capped data plans. Excess usage charges were the norm for Australian ISPs in the 1990s. To compete, innovative ISPs offered “unlimited” data plans, which shaped you when you exceeded your quota. Those are now the norm. I think a mobile carrier that introduced a similar policy, even if the base data allowance was substantially less than 1Gb, could that find it was a “game changer” in the Australian market.

Ironically, Virgin already do this with their mobile broadband plan, which offers 4Gb of capped data and unlimited phone calls, over the 3G network from home, for just $80 a month.

What can I do?

If you’re concerned about this situation, or have been affected by it, you can contact Virgin Mobile directly. If that doesn’t get you anywhere, file a complaint online with the TIO (Telecommunications Industry Ombudsman.)

28 thoughts on “In Australia, a 3G mobile data plan can cost you thousands

  1. Solid post. I hadn’t thought about that particular attack. Certainly it’s yet another reason why humans should have to count bits, especially when they are not given proper tools with which to do so.
    And then there is the fact that data charges differ depending on whether the data is used on a phone or a computer (using a 3G modem).

  2. Regarding capped plans: This is how it is done in France, and it works fine. With 2 of the major companies (Bouygues/SFR), you get 1GB of data and then you’re capped to GPRS speeds. With the other company (Orange), you lose all internet connectivity after reaching your limit (and receive a text explaining why you’re cut off). I see no reason why this couldn’t be done in Australia as well.

  3. I use Optus mobile broadband. There website is such a pile of rubbish, that it is almost impossible to even find out how much you are using at anytime anyway. There are about 5 different ways to login, and only one gives you the actual info that you need. Optus, your website is a desgrace.

  4. @sd, this is a good point about France, thanks. I suspect that mobile infrastructure in Australia may not yet be up to handling a situation where many people use a full 1Gb of data a month. For this reason, a cap might need to be smaller.

    Although the fact that Virgin sell 4Gb of capped data to home users (where they compete with ISPs), but not to mobile users (where they compete with telcos) may imply that I’m wrong, and the network can handle it fine.

    Regardless, I don’t think this ever justifies selling you “1Gb of data” when the likely penalties for actually using the 1Gb you supposedly “have” vastly exceed the initial cost. This is an incentive to never use what you are supposedly entitled to.

    @cak Thanks for commenting. I’m sorry to hear that the Optus site isn’t much good either.

    It’s also a shame that there is a clear financial incentive for the carriers to _not_ give you good quality information about your data usage.

  5. In canada with bell, the pay per use rate for overage on data plans is .05/MB with the $25 500MB plan and .03/MB with the 1GB plan and above. If you do the math, it just means that 1 more GB on the 1GB plan costs just as much as the the plan itself. So 2GB would just cost $60. And they have overage limits with your plans (around $100) so you don’t run into nightmare scenarios like that one.

  6. Hey – I’m pretty sure it used to be 1.5c/KB, or $15/MB or $15,000 for that second GB – $2,097 is a relative bargain ;-)

    I just came back from Finland where I bought a PrePaid SIM for €6.50 (Includes €6.50 of credit) and paid €6.90 for a week of unlimited, no cap, 3G data.

    I wonder if we’ll ever have such good value here.

  7. @Julien although they are cheaper, those are data-only plans, right? The plans I’m describing are to use data on a phone, alongside calls. Even Virgin Mobile has a capped non-phone broadband offering.

    However, the fact that Virgin Mobile, Exetel & Internode can all offer these over Optus’s network seems to imply that there is no reason why similar offerings couldn’t be made for handset users.

  8. Hi Angus,

    Many thanks for bringing my attention to your valid concerns; we are always interested in hearing from valued Members.

    We do now offer a Cap (iPhone Rollover Cap 100) with an inclusive 5GB for Members who need extra room to move online, added with a further 1GB DSP, 6GB is now available without excess data charges being applied.
    Please note; at the time of writing; 6GB is greater than our largest included Mobile Broadband (internet, non-mobile phone) plans!

    +Currently we are reviewing the online metering for possible alternate displays, thanks =)

    Kevin JD,
    Virgin Mobile.

  9. Thanks for posting, Kevin. It’s great to hear back directly from Virgin Mobile on this.

    I must admit, I don’t see the $115 per month package as a viable solution. It still comes with the same $2/Mb excess rate.

    The fact that Virgin Mobile can offer 6GB for $115 makes me wonder why a different user would pay $10,485 for the _same data_, by virtue of their plan choice. That is the mother of all market segmentation.

    In the attack I described above, the attacker would take less than 24 hours to rip through the 6Gb quota. In the remaining time before anyone becomes aware, that’s nearly $14000 in legitimate excess charges.

    At the same time, the meter delay still discourages the user from actually using the full 6Gb, even though they’ve paid for it.

    I’d be very interested to hear your thoughts on any of the improvements that I suggested in the blog post.

    – Angus

  10. Ummm… I have 5GB (8Gb = 1GB) per month shaped on Virgin Mobile Broadband for $40/month, pretty reasonable compared to ADSL/2 plans. Wasn’t interested in any plan with excess charges. Have been using it without too much trouble for the last 18 months. I’ve changed address 3 times, it’s saved me hundreds in fees and I have’t been without a connection. Plus I sleep like a log! Virgin’s website, software and customer service is pure rubbish but it hasn’t been an issue.

  11. That’s great Karl, however those caps are only available as broadband-only. If you want to use a mobile handset then I don’t think a capped option exists yet, for some reason.

  12. anon, someone on whirlpool suggested this as well, and I think it’s a good idea. On an iPhone no app can monitor this data, but there is a built-in “Counter” that you can look at to see usage. For Android phones, as you say, there is NetMeter.

    However, on-phone counters are never 100% accurate. The reason is that the carrier is counting data as it passes through their network, before it gets to the cell tower. Packets which are lost “in the air” will still be counted by the carrier, even though the phone never sees them. If you are in a marginal signal area, this can add a significant overhead to your usage.

  13. I’ve just been hit by a ~$530 bill for excessive use and the phone was locked this morning; Virgin sent me this message to confirm the situation:

    “Hi Brian, you’ve reached your agreed credit limit. Your service will be temporarily restricted. Please immediately make a payment over the web or by phone on 1300 555 100, thank you.”

    However, my phone ran out of power last night and was OFF…
    I don’t think I’ll be staying with this carrier, and I’ll be sending my beloved N97 back also. :(
    Now I’ve gotta spend several weeks of fighting with them to get this sorted out.

    Some ways to improve the service;
    Send % emails or sms so we know the data used
    Allow the client to set ‘Stop at limit (or shaped would be better), or charged at $5/byte’
    Update the usage tool to a better app (or an app for the phones?!)
    Include a graph of the days usage – although that then lends to proving the data used isnt true

  14. I recently received my Virgin phone bill.

    I have a 1GB data plan and for the excess 270MB I was charged $573.

    After calling the customer service centre to ask for some clarification as to how Virgin can charge more than 8-10 times that of their competitors. The employee said I have signed a contract and Im obliged to pay it. For a company that markets itself as best value, I hardly think this is best value.

    I have now been put on payment plan.

    Virgin will get a great deal of negative publicity for ripping me off. Hopefully by posting on facebook and forums we can educate other users who may face similar problems and in the long run Virgin can suffer.

  15. I have been enjoying the ‘free gig’ for 3 months of data on offer recently. . I went over the 1gb of data by a mere 8oooo kb and have been charged $160. No warning txt was sent to notify me i was exceeding the limit and as you posted above the net data graphs are extremely unreliable. . Im just lucky i was using opera mini (as it shrinks data drastically) otherwise i could a been stung thousands.

  16. If you are having trouble and want to activate opera,bolt,ucweb ect via virgin check out my blog on mocospace user xxjagerxx.hope that helps

  17. No answer from Kevin JD of Virgin yet – 7 months later and excess charges are still the same.

    A shame. Virgin was the frontrunner in my search for a better deal except for this inequitable issue.

    Virgin like to be seen as the common sense provider – with realistic contract exit costs and a better handle on tech-savvy low to midrange plan users, but why oh why are mobile (phone) data plans not shaped???

    You’d get me as a customer for sure, but by then I’ll probably end up with another carrier.

    The risk of a mega-bill is just too great.

    Thanks for your common sense and clear presentation of the facts Angus –

  18. You can use the DataMan app to monitor your data use in real time. This useful app monitors your cellular and Wi-Fi data usage in the background, keeping a log of your activities. What’s more, it geotags your data activities. To help manage your data consumption, you’ll receive real-time alerts when you exceed your usage thresholds. There are 4 levels of alert thresholds that you can customize to your needs to prevent additional charges to your bill. You can find DataMan in the App Store.

  19. I’ve recently been charged $200 for excess data on Virgin mobile and have used all these arguments to reduce my bill by $60. Also on their website they give the billing date as the date your data quota is reset. Well here is the trick that cost me and what the web site doesn’t tell you, the data Virgin says, is reset 12pm on that bill date. Data downloaded on your billing date is added to your months total before the reset. I have a sneaky suspicion though, that the quota is reset at different times during your bill date and not specifically at 12pm which is pretty much the start of the next day. If I am correct on this I will be arguing for a refund of the whole amount. Also I found out if you are tethering to a pc, the phone’s data counter doesn’t refresh until you disconnect . Make sure your computer has auto updates turned off. There is no safe way to go close to the end of your quota. Any mistake could cost you dearly and god help you if you lose your phone and someone downloads past your quota.

  20. hi,

    thanks for that info. I have a question, when optus sends an itemized bill with the MB downloads for a wireless mobile modem, is there anyway that their info is incorrect? and if so, how can you actually find out? I received a bill for $2100 download when on an average we have a bill of $150, i have gone to optus before and asked if i need a password for my wireless and they said no, later i found out that is not true.

    can i request an internal investigation?

  21. I am with Virgin and have a 1GB plan that I almost never use (in the last 4 months I have not used more than 200MB).

    In the past I exceeded my call cap and I now regularly check my usage on the iPhone app and I reset my data on my roll-over date every month. Last month when checking my call usage I was shocked to see that I have exceeded my data limit.

    This matched my phone’s recorded data usage but I have no idea what I downloaded. I had not changed my usage habits, no new apps, no jailbreak and my phone is PIN locked. Thankfully I saw it when I did – I turned off my data only 25MB (i.e. $50) over my limit but if I had used it normally for the rest of the month the excess charge could have been more like $300.

    When I saw my bill I saw that 900MB (thats equivalent to 15 hours of YouTube) had been downloaded in ONE day! I called the complaint line to ask for details about the usage to prevent this happening again.

    I was told that:
    The could not give details of usage (for privace, yet my bill contains every phone number I call) and there is no way to limit usage. The suggested that “You can switch off your 3G”.

    Thanks a lot. That’s why I bought the phone. A little like a manufacturer telling me that their product is only dangerous IF YOU USE IT.

    I am 12 mths into a 2 year plan but at this point I am considering changing providers (for me and my family) as soon as I can. From what I can see the Vodafone Easy Data 35 is the most reasonable.

    But if there is an entrepreneur looking to offer a limit or shaped plan you’ll have my business.

  22. thankyou so much for your article and other user’s comments. I had phone bill shock of $530 when my normal monthly bill is $44. Excess data charges from using iphone at home wifi but somehow automatically switched to 3g. I was pretty cranky but after reading your article, i then rang virgin and they reimbursed me $200.

    Ideally, however i would like virgin to tether the user’s data downloads when allowance is reached rather copping them with a huge bill! Telstra is already leading the way with mobile data shaping so if enough people voice their concerns, i think we can make them do it.

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