Have you ever opened up your cell phone bill and gotten a nasty shock in the form of excess charges? The Federal Communications Commission (FCC) on Wednesday released new data about the prevalence of this phenomenon, also known as "bill shock."
The commission fielded "bill shock" complaints from 764 people in the first half of 2010, according to new white paper. About 67 percent of those complaints concerned charges that were in excess of $100 more than expected, while 20 percent were regarding complaints of $1,000 or more. The largest complaint came in at $68,505.
To help combat the practice, FCC Chairman Julius Genachowski today formally announced plans for a rulemaking that would set out ways to avoid bill shock; like requiring wireless providers to warn users when they are about to bump up against their data or voice caps.
On Thursday, the FCC will vote on a "simple, practical, non-prescriptive manner, using technology widely available today, and in a way that encourages innovation in informing consumers," Genachowski said during an appearance at the Center for American Progress in Washington, D.C.
"Most people don't know what a megabyte is. But they do understand when they get an alert telling them they're about to go over their limit and incur additional fees," he said.
Many overage charges are incurred thanks to international roaming charges, going over data, voice, or text allotments, unexpected charges when a phone is in "airplane" mode, charges for mandatory data plans for which users are unaware, unknown taxes and fees, and confusion about promotional rates, the FCC said.
"This complaint record is more evidence that bill shock is a widespread consumer problem – and it gives us new evidence that it's often very costly," Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, said in a statement. "We're getting hundreds of complaints per year on bills that have gone up by a thousand dollars or more. That's a serious issue by anybody's standards, and one that we're moving to address."
As a comparison, the FCC last year received about 3,200 complaints for "mystery fees" – also known as "cramming" – or charges for services to which they did not agree. The commission also received about 1,900 early termination fee complaints last year.
Wednesday's white paper come several months after the commission released a study that said 30 million Americans had experienced "bill shock." In May, the FCC also announced that its consumer task force was examining the issue of "bill shock." At the time, the FCC said it was considering a plan that would require carriers to send text messages when users are running up roaming charges or are close to hitting their data limit, a process that has been in use in the European Union since June 2009.
On the mystery fee front, Genachowski said the FCC will soon hold a public forum on unexpected phone charges and related issues. He pointed to recent refunds that Verizon agreed to give its customers for unnecessary data charges. The commission's enforcement bureau launched an investigation into the Verizon matter earlier this year, and while the agency "can't comment on the specifics of an ongoing investigation, I can say that our staff is working overtime to get to the bottom of this matter and investigate other complaints as well," he said.
Chris Guttman-McCabe, vice president of regulatory affairs for CTIA, the wireless industry trade group, said he was "concerned that prescriptive and costly rules that limit the creative offerings and competitive nature of the industry may threaten to offset these positive trends."
CTIA pointed to Better Business Bureau data that said 97.4 percent of wireless consumer complaints are resolved, as well as FCC stats that said overall wireless complaints fell 4 percent between 2008 and 2009.