FCC attempts to put an end to cell phone 'bill shock'
After hearing hundreds of complaints from consumers about so called "bill shock," the FCC today is stepping in with an initiative intended to force cell phone providers to provide far more notice to customers when cell phone usage triggers unexpectedly high bills.
It's still very early in the process -- the FCC today asked for comments on a variety of alternatives and has to develop a formal rule -- but the direction is clear.
"We are hearing from consumers about unpleasant surprises on their bills," said Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, in a statement. "We've gotten hundreds of complaints about bill shock. But this is an avoidable problem. Avoiding bill shock is good for consumers and ultimately good business for wireless carriers as well."
Gurin at a news conference pointed to the European Union as an example of what carriers here should be doing. There, carriers have to send text message both when customers start running up roaming charges for voice calls and when they exceed a set limit for data roaming charges.
The FCC wants to implement a similar requirement for the U.S. by year-end, but is looking at other options besides text messages.
It's asking for information about what consumers want and what carriers can do to more easily track and display either minutes used or minutes left. It's asking whether carriers can provide systems which allow consumers to set a level where
an alert goes out. Finally it's asking about other ways to provide similar kinds of alerts, whether by e-mail or phone.
Also unclear yet is who any alerts should go to. On family plans, parents could be paying the bill, but kids' phones could be generating the high bills, so the question is who to alert.
Gurin, who is a former top executive of Consumers Union, the publisher of Consumer Reports, said at the news conference today that the move is one of the first from the FCC's new Consumer Task Force that he heads and he promised others were on their way. The task force was formed by FCC chairman Julius Genachowski in January.
"We are very committed to taking a lot of steps to make [bills] clearer for consumers," he said.
He said that in the coming months the FCC will make moves to make it easier for consumers to compare broadband speeds and verify the speed they are getting and to require cell phone provider to make their "murky" policies on early termination fees far clearer.
Gurin said complaints about unexpectedly high bills have flowed into the FCC from users of every major wireless carrier in all parts of the country.
CTIA, the association of wireless carriers, did not immediately reply to a request for comment.
Among the complaints Gurin cited:
"My [cell phone] bill suddenly tripled in one month. . . When I got to looking it over, I noticed that they had charged me for my mobile to mobile minutes. They had advertised free mobile to mobile."
"I received a bill this month with over $500 in overage charges which led me to check my statement. I found that on my wife's and my phones over the past three months we have had 246 calls totaling 304 minutes from [two unknown numbers]."
"I recently updated my wireless plan in Sept 09. Since I upgraded my plan, my bills have been outrageous. I was informed . . . that my rollover minutes were taken away when I changed my plan. . . . I was never informed this would affect my rollover minutes and have thus racked up hundreds of dollars in overages at $.45 a minute."