FCC says consumers are 'bill shocked'

Federal Communications Commission releases survey results finding that one in six customers have been shocked by unexpected cell phone charges.

The Federal Communications Commission said Wednesday that one in six U.S. mobile-phone customers have been shocked by unexpected cell phone fees on their bills.

The agency conducted a survey of roughly 3,000 Americans and found that about 30 million Americans, or one in six mobile users, have experienced a sudden increase in their monthly bill that is not caused by a change in service plan. The survey indicated that 84 percent of respondents said their mobile carrier did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads. And about 88 percent said their carrier did not contact them after their bill suddenly increased.

The survey indicates that the amount of "bill shock" varies widely. More than a third of people who experienced bill shock said their bills jumped by at least $50. Roughly 23 percent said the increase was $100 or more.

"The wireless industry has achieved remarkable innovation--and mobile is increasingly essential to the daily lives of Americans," FCC Chairman Julius Genachowski said in a statement. "But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace. A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees."

The survey also found that nearly two thirds of home broadband users with early termination fees did not know the amount of this fee that they could be accountable for if they ended their service before their contracted ended.

The FCC has been looking at ways to clear up consumer confusion surrounding cell phone bills, early termination fees, and other issues. The agency launched a proceeding last August to examine how consumers could be empowered to make informed decisions about their communications services. In January, the FCC also sent letters to the nation's four largest cell phone providers and Google, asking them to explain how they implemented early termination fees. And in early May, the agency released a public notice asking the industry and the public to comment on ways to reduce bill shock.

One of the proposed solutions would require wireless operators to send text messages to subscribers who are close to going over their plan limits. Similar rules are in effect in Europe. Joel Gurin, chief of the FCC Consumer and Governmental Affairs Bureau, said on a conference call with reporters Wednesday that the agency has not yet decided if it will create new rules or rely on voluntary efforts. But he made it clear that the agency hoped wireless companies would provide more transparency and clarity in their practices to consumers.

The wireless industry says new rules to require operators to alert consumers is unnecessary. In a statement, Steve Largent, CEO and president of the CTIA Wireless Association, pointed to several surveys conducted by independent third parties, such as the recent American Consumer Satisfaction Index, which found that wireless customer satisfaction set an all-time high for the second consecutive year in 2009. He also cited the Better Business Bureau, which found that 97.4 percent of complaints regarding wireless service are resolved.

"From prepaid to postpaid, subsidized handsets to unsubsidized, contracts with ETFs to those without, large, medium or small buckets of minutes and 'all-you-can-use' plans, consumers have an unbelievable range of choices," he said in a statement. "The industry does provide 'simple and easy to understand' plans for every type of American consumer. Carriers go to great lengths to keep their customers satisfied and informed."

 

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