Cell Phone ‘Bill Shock’ Remedy; To Little? Too Much? To Early to Tell.

Consumer’s are complaining about their cell phone bills to the Federal Communications Commission (FCC) in record numbers, and the agency has decided to take action. This week the FCC will release their proposal to require carriers to notify users of overage charges or sharp increases on their phone bills.

The FCC received 5,130 inquiries related to wireless charges In the first three months this year, representing a 28% increase over the same period in 2009. Furthermore, an FCC survey conducted earlier this year discovered that 30% of respondents claimed to have experienced “bill shock,” over unexpected charges related to data overcharges and other services that they only learned about when they received their bills.

According to the FCC, the most common issue for consumers are small charges and fees that consumers can’t figure out what they are for, according to Validas, a Texas-based company that audits telecom bills for corporations and individuals.

Edward J. Finegold, Validas’s chief analytics officer, said another key problem involves billing by third parties, such as a text-messaging service or ringtone provider, that piggyback on the carrier’s billing system and therefore land on user’s phone bills. For example, a user may send a text message to an outside service through an offer in, say, a videogame, expecting a one-time charge, but had the user read the fine print, they would have seen they actually authorized the service to automatically trigger a monthly subscription fee. “None of this is illegal, but most people would expect that if you have a trusted relationship with your carrier, it would have strict standards on third parties who add charges to its bills. But that is not happening.”

Advocacy groups don’t think the awaited proposal will go far enough, saying that with all the bundling of services, and the number of applications available for consumers to download, the ability for consumers to decipher the multi-page bills has become even more difficult.

The Wireless Association (CTIA) on the other hand, points to the fact that customers already have many ways to track their minutes and data usage. They have also advised against the legislation of billing practices proposed by Sen. Tom Udall (D-N.M.), that aims to require cell phone carriers to notify customers by e-mail or text message – free of charge – when they have used 80 percent of their monthly limits. CTIA said in a statement about Udall’s bill: “We are concerned that this bill has the potential to cause customer confusion and frustration.”

It will be interesting to see the actual FCC proposal later this week to see if it finds the balance between informing consumers and reasonable carrier actions.



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