FCC Makes Plans to Remedy Phone Bill Shock

What are these charges?  Is this part of my coverage plan? Why is my cell phone bill so high?!!”  You might have asked these questions before at some point as you opened your phone bill.  This is what is known as “phone bill shock”– that swelling feeling of confused outrage you get when you receive a phone bill that is much higher than anticipated.  It has become so common that it is now pretty much a household phrase.

In attempts to prevent “bill shock”, recently the FCC is considering requiring cell phone companies to alert their customers before charging additional or excessive fees.  Cell phone users across the nation would be alerted for fees regarding roaming and text messages, as well as extra data use charges and bills that fall outside of the customer’s normal monthly rates.

The FCC plans come as a response to hundreds of complaints from customers who have been experiencing bill shock over surprisingly high monthly rates.  Though cell phone companies serve over 200 million people, and “hundreds of complaints” are only a fraction of their customer base, apparently the complaints have been enough to warrant federal attention.

Several instances of outrageously high phone bills have also sparked the discussion on the FCC’s plan to mandate customer alerts.  We’ve all heard stories of people being over charged by hundreds or even thousands of dollars.  And who can forget the St. Germain family, who were charged over $18,000 for their Verizon wireless bill?  Their son had been habitually using his cell phone to connect to the internet through a laptop, which resulted in the exorbitant cell phone bill.  The St. Germain family is still contesting the bill.

The FCC plans appears to mimic actions taken by European officials last March.  The EU has already required cell phone companies to provide such alerts to their customers.  EU rules similar to the FCC plans were enacted after customers complained about high rates accumulated due to data-roaming charges.  EU cell phone companies must now warn their users when they are approaching data-roaming limits.

FCC’s recently conceived strategies are part of a larger attempt to overhaul and update their “truth-in-billing” rules that were implemented in the 1990’s as cell phones made their way to the forefront of telecommunications.  The FCC adopted truth-in-billing rules hoping that both cell phone companies and customers would have access to clarifications regarding any discrepancies in billing.  However, the rules apparently failed to anticipate the “bill shock” that is currently rampant among cell phone users.

FCC officials have not yet issued any formal details regarding how the alerts will be issued, whether by texting the customer or sending an e-mail or voice message.  In the EU alerts are sent by text message as the customer approaches limits, and we are not sure if FCC officials will copy their style.  The FCC is welcoming comments and input from customers as they tailor their new package of rules.  Customers can participate by sending their input to the FCC.

In the meantime, victims of bill shock might want to inquire if their cell phone provider offers what is known as “retroactive rate adjustment” or “retroactive upgrading”.  This is where the provider allows customers who have inadvertently exceeded their monthly minutes to retroactively switch to a different plan which would have covered the minutes.  Cell phone carriers have an interest in their customers obtaining monthly plans that best suit them; they will often monitor minutes used and offer suggestions for different plans, especially in the customer’s first months with the company.  Several companies currently engage in such practices, mostly on a case-by-case basis.

So is the EU’s remedy for phone bill shock going to be suitable for U.S. customers?  I think it will be, and in fact I think it is a good idea that is long overdue.  It shouldn’t be a big problem to provide a little head’s up as a courtesy to the customer- especially for companies who specialize in communications.

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