CU files comments with FCC backing cell phone 'bill shock' rules

Consumers Union (the nonprofit publisher of Consumer Reports) filed comments today with the Federal Communications Commission (FCC) in support of the agency's proposed rules to combat cell phone "bill shock": the problem of customers hit by unexpected charges on their mobile phone bills. Included in the submission were signatures from over 47,000 people who agree with the FCC's proposal to require wireless companies to notify customers before they exceed their limits on minutes, text, and data.

Parul P. Desai, policy counsel for Consumers Union, responded to industry groups that have dismissed the proposed rules as unnecessary, pointing out that some carriers do not offer reliable tools for consumers to keep up with their limits and that the current efforts of carriers have clearly not limited the experience of bill shock among customers.

"Consumers Union believes consumers will benefit most from consistent, industry-wide rules, and thousands of consumers agree," said Desai. "Consumers cannot rely on voluntary industry codes to protect them from experiencing 'bill shock.' The FCC should implement mandatory, enforceable rules."

CU urged the FCC to act on this issue in January 2011, citing a Consumer Reports survey of 58,000 subscribers conducted in September, 2010: One in five respondents reported receiving a cell phone bill within the past 12 months that was significantly higher than they had expected. Half of the bill-shocked respondents said the bill was at least $50 higher than expected, and one in five said the bill was $100 higher than they had expected.

Don't let it happen to you: Take a look at the CR story, "5 ways to avoid cell-phone bill shock."

Following are some of the FCC's proposals to remedy bill shock, from a press released issued last October:

Over-the-Limit Alerts: Consumers that have limited bundles of voice, text, and/or data can incur expensive overage charges when their cap is exceeded. Without constant monitoring, these charges quickly add up—particularly with "family plans" where multiple people share the same bundle. The FCC's proposed rules would require customer notification, such as voice or text alerts, when approaching and having reached monthly limits that will result in overage charges.

Out-of-the-Country Alerts: Many American customers don't know that their "unlimited" minutes, texts, or data plans only cover use within U.S. borders. Consumers can see their bills skyrocket when they travel abroad because of the additional fees for "roaming" on a foreign mobile network. The FCC's proposed rules would require mobile providers to notify customer when they are about to incur international or other roaming charges that are not covered by their monthly plans, and if they will be charged at higher-than-normal rates.

Easy-to-Find Tools: Many wireless providers use some technological tools to alert consumers about their bills. For example, iPad users automatically receive text alerts when they are about to go over their data limits. But these tools are not widely available and too many consumers don't know about them. The FCC's proposed rules would require clear disclosure of any tools offered by mobile providers to set usage limits or review usage balances. The FCC is also asking whether all carriers should be required to offer the option of capping usage based on limits set by the consumer.

—Carol Mangis

—Carol Mangis