Thursday, October 14, 2010

FCC Proposes "Bill Shock" Rules to Help Wireless Users Avoid Unexpected Charges

The Federal Communications Commission today proposed new rules that would require mobile service providers to give alerts to customers to avoid unexpected overage charges on their bills.  The FCC says mobile "bill shock" (unexpected jump in the monthly bill) is an increasing problem for consumers; the Commission says it wants to help consumers better control their mobile costs.  One in six mobile users have experienced bill shock -- more than half of them experienced an increase of $50 and up. 
The FCC wants to prevent this so-called bill shock by requiring cell companies to give consumers simple alerts, in the form of voice or texts, before they incur overage charges.  The rules would also require providers to alert customers when they're about to incur international or other roaming charges that aren't covered by their plans and if they're going to be charged more than the normal rates.  Finally, the rules would also require clear disclosure of tools the provider offers to set usage limits or reviews of usage balances.  The proposed rulemaking also seeks comment on whether all carriers should be required to give consumers the option of setting their own usage caps -- and also seeks comment on whether small providers or prepaid services should get an exemption from these requirements or be given extra time to comply.

Mobile companies have long been criticized by consumer-protection groups for what's perceived to be deceptive billing, early termination fees, exclusivity deals, and the like.

For a creative description of the consumer-protection issues facing wireless carriers (and because I enjoy creative writers!), see Timothy Noah's write-up for Slate.