It's happened to far too many Americans. You open up your phone bill and wonder why there's an extra zero, or several, on the amount that you owe.
Maybe your son or daughter downloaded a new game, or your phone automatically went online to upgrade its software. Perhaps a family emergency meant more time talking than usual. In any of these cases, it would be commonsense for consumers to get a warning before they exceed their voice minutes, text messages, or data usage. And cell phone companies should not bill customers for extra charges and fees for services they never consented to.
A recent Federal Communications Commission (FCC) survey found that 30 million Americans - or one-in-six adult cell phone users -- have experienced "bill shock," and 84 percent said their cell phone carrier did not contact them when they were about to exceed their allowed service limits. In about one-in-four cases, the bill increased by more than $100 -- and sometimes much more than that. The largest phone bill complaint to the FCC so far this year is for a whopping $68,505.
Thankfully, FCC Chairman Julius Genachowski has proposed new rules to help protect consumers from cell phone "bill shock." His proposal includes a recommendation I put forward in my Cell Phone Bill Shock Act of 2010 that would require providers to notify customers before they exceed their monthly limits.
I commend Chairman Genachowski for the steps he is taking and encourage the FCC to also include other provisions from my bill.
The Cell Phone Bill Shock Act would help protect Americans from "bill shock" by requiring cell phone companies to notify customers by email or text message -- free of charge -- when they have used 80 percent of their monthly limits under their current plan. It would also require these companies to obtain customer consent before charging for services that are not covered by their regular monthly service plan.
These simple measures would increase transparency and reduce "bill shock" at a time when smartphones, such as BlackBerries and iPhones, are exceedingly popular for much more than just talking. Given all the new innovations in wireless technology, it should be easy for phone companies to warn customers about reaching or exceeding their monthly limits.
More and more Americans are experiencing "bill shock" and it's time that we do something about it. Explicit notification and consent guidelines must be enacted.
Here's what organizations have been saying about the Cell Phone Bill Shock Act:
Consumers Union, Nonprofit Publisher of Consumer Reports:
"It is clear laws that make it easier for consumers to understand their bills and alert consumers prior to overage charges are needed, especially in such difficult economic times. The provisions of the (Cell Phone Bill Shock Act) are very precise and clear, especially those ensuring that consumers will not be charged extra for being notified of reaching 80 percent of their monthly limit."
National Association of Regulatory Utility Commissioners:
"To make informed decisions and to avoid bill shock or other unforeseen charges and fees, consumers need easy access to real-time information. The FCC complaint and survey data make clear that wireless bill shock is a concern. S. 3872 would ensure that consumers have access to the data needed to avoid bill shock and we urge Congress to adopt this legislation."
Media Literacy Project:
"Senator Udall's 'Bill Shock' legislation is a step in the right direction in protecting some of America's most vulnerable consumers - poor, immigrant, rural and low-income people. Many people who can't afford internet and other more costly media tools opt for cell phones to stay connected. His efforts to increase protections will benefit these groups and all Americans by requiring cell phone companies to be accountable to consumers."
Public Knowledge
"The FCC's role in stepping in to aid consumers demonstrates that actions must be taken to clarify potential fees to cellular customers. The provisions outlined in your bill will specifically ensure customers are fully aware of potential charges for overage and unique services."
U.S. Senator Tom Udall is a member of the Senate Commerce, Science and Transportation Committee.