U.S. Government Aims to Curb Cell Phone 'Bill Shock'

Who can't relate to opening a monthly cell phone bill and seeing a balance substantially greater -- in some cases hundreds of dollars -- than expected?

It is precisely that feeling -- so-called "bill shock" -- that the Federal Communications Commission hopes to eliminate with a new initiative announced Tuesday by the agency's Consumer and Governmental Affairs Bureau (CGB). The initiative is among the first put forward by the FCC's recently announced Consumer Task Force, which is chaired by Joel Gurin, Chief of the CGB.

"We are hearing from consumers about unpleasant surprises on their bills," Gurin said 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."

The FCC, which formally asked for public comment on the issue Tuesday, could require mobile providers to alert customers before charges get out of control -- a system similar to one that currently exists in Europe.

The $18,000 Cell Phone Bill

Data, roaming and other charges can quickly cause monthly bills to balloon out of control. In a blog post, Gurin himself said he's fallen victim to "bill shock."

"Without realizing it, I began using my cell phone more frequently and for longer conversations," Gurin wrote. "By the time I caught the problem, my monthly bill had gone from about $300 a month to well over $500, two months in a row."

Gurin identified several causes of "bill shock," including "unclear or misunderstood advertising, unanticipated roaming or data charges, and other problems" which "can lead to charges that people don't expect to get."

In one famous case, a Boston family received a monthly bill from Verizon Wireless in the amount of $18,000.

"In the European Union, carriers are required by law to send text messages to consumers when they are running up roaming charges or getting close to a set limit for data roaming," Gurin noted. "We're issuing a Public Notice to see if there's any reason that American carriers can't use similar automatic alerts to inform consumers when they are at risk of running up a high bill."

Industry Defends Practices

In a statement Tuesday, Steve Largent the President and CEO of industry trade group, CTIA-The Wireless Association, responded to the FCC's announcement.

"We look forward to educating the Commission on all of the carriers' activities and offerings so that customers can stay informed," the statement read. "Each of the four large carriers, as well as many smaller carriers, provide consumers the ability to monitor how many minutes, how much data and how many texts they have used for free by simply typing key phrases in their phone such as *MIN, *BAL, # MIN, #DATA, *2 and more."

"Consumers can also call their carriers or check their usage via their carriers' websites," he added. "Even though the 'hundreds of complaints' that the Public Notice references is less than four ten-thousandths of a percentage of the industry's total subscribers, the industry strives to serve and provide all of our 285 million customers with the necessary tools to have a positive experience."

The public has 45 days to contribute to the comment process.