Sam's deal

Sam purchased a mobile phone for $1-00 at a shopping centre. He signed a contract and was told how much the rental and calls will cost. He knew it would be around $30 per month. Sam's first bill came to $70 for the month and he had trouble paying it. The second bill was worse and the third bill came a week after he lost his part-time job. Sam couldn't pay the bill so he didn't, he just assumed that the phone would be cut off.

One morning a Sheriff came to Sam's door and gave him a document from the Court advising that payment of $500 for the mobile phone was required. Sam couldn't believe it, he had only missed paying one month's bill of around $80. How did he now owe $500.

The $500 debt covered the contract which required that Sam pay $30 each month for 12 months and included fees charged by the network provider's solicitors to prepare the court documents.