Great news for our cell phones!
On Monday, October 17, wireless phone providers agreed to tell customers before they approach their monthly limit for voice, data, and text. When providers don't notify their customers of a sharp increase on their phone bill, it is known as bill shock.
New FCC regulations mean that this won't be you when you look at your cell phone bill.
Hidden fees have been the bread and butter of telecommunication services for thirty years. Cell phone providers are especially good at their promotions and especially good at clouding exactly what they're charging customers. When 80% of adult Americans own a cell phone, the effects are widespread.
Last year, the FCC received about 1,500 complaints concerning fees of $100 to $1000 on their wireless phone bills. 20% of the complaints received in the first two quarters of 2010 claimed cell phone providers had charged the customer over $1000 in extra fees.
The largest bill from complaints in early 2010 was $68,505.
Possibly spurred by a study from the Government Accountability Organization in November 2009, the FCC conducted its own survey in 2010 with ugly results. Bill shock, the FCC discovered, is a common occurrence. 17% of all cell phone-toting Americans, or 30 million people, have experienced bill shock. 84% of those were not contacted by their phone service before they exceeded their set data/voice/text, 88% were not even contacted after the bill sharply increased.
According to the FCC, the causes of bill shock are multiple—when users are overcharged it can involve more than one extra fee. In general, consumers are not well-informed about these charges: 34% of cell phone users who pay their own bill noted that it was not clear whether they would have to pay an early termination fee to switch providers.
Unexpected charges can come from:
- international roaming
- exceeding limits for voice, data, and text
- using Wi-Fi in airplane mode
- mandatory data plans with certain new phones or in plans unknown to the consumer
- confusing promotional rates from marketing, salespeople, or customer service
- taxes and other fees
Because of the study's findings, the FCC has mandated clear communication in regards to a customer's usage, including international roaming charges. Wireless phone providers like Verizon and AT&T voluntarily agreed to the terms of the new guidelines. The FCC stated that it would postpone introducing regulation for a "trust but verify approach."
Full implementation of the notification system for data, voice, text, and international roaming won't be ready until April 17, 2013.
I, for one, am incredibly pleased to hear that the FCC is stepping up to curb our mobile phone bills. Rather, the FCC is taking notice of two facts: Americans don't read fine print and our service providers know it. That's why we always encourage you to read the terms and conditions before you sign up for phone service. (I need reminders too, I'm American born and bred.)
I'm not so pleased about the implementation deadline, though. You have to wonder: if CTIA, The Wireless Association, hadn't agreed to the terms, would the FCC's regulation make the system roll out any faster?
See the FCC's guide on how to avoid bill shock in the meantime.
If only the FCC could be as tough on overcharging and hidden fees as it is on profanity!