A new Consumer Reports survey conducted just last month found that, in the past 12 months, a whopping one in five CR Online subscribers received a bill that was significantly higher than they expected.
Doesn't add up
That figure is at odds with what big cell carriers said when the magazine reported about this issue only last May -- before CR had its own survey data. "I can tell you that it's a very, very small percentage," Nancy Stark, a Verizon spokeswoman, told Consumer Reports. "It's a very, very, very low percentage," said Mark Siegel, an AT&T spokesman.
Also, a Federal Communications Commission (FCC) survey discovered a smaller incidence than was found among CR readers: Just one person in six is ever bill-shocked, according to the FCC survey. The surprise bills for a third of the FCC group were at least $50, while they were $100 or more for 23 percent.
Corrective action
Now the FCC is proposing that carriers be required to send customers an alert before they run up an overage tab - something carriers oppose, according to The Wall Street Journal. AT&T and Verizon Wireless did not immediately respond to requests for comment.
Consumers Union (CU), the publisher of Consumer Reports, supports the FCC proposal. "People should not be blindsided by these surprise charges on their bill," said Ellen Bloom, senior director of federal policy and Consumers Union's Washington, D.C., office, after the FCC's announcement of its proposal. "We think that's wrong, and we are worried that the problem is getting worse."
Bloom says that at a minimum, CU supports providing all consumers with free and timely "usage alerts." Consumers should know when they are getting close to a specified limit on data service, or they are about to run up steep roaming charges. "We also think it is critical for consumers to know how much they will be charged for going over their allotted time," said Bloom.
Nothing new
Cell phone bill shock has a long and ugly history. Back in 2005, Ed of Houston told ConsumerAffairs.com that his 68-year-old mother received a warranty replacement phone, from Cingular Wireless, for her defective Motorola phone. "After using the phone for a little over a month, she received her bill. It was for a whopping GRAND! $1000! ONE THOUSAND DOLLARS!" Her phone bill is usually somewhere around $80.
Ed says he learned she was being charged because her new Motorola flip phone did not hang up her calls when she closed it like her old Motorola flip phone. Apparently the phone also did not naturally hang up after either caller terminated the conversation. "Needless to say," Ed concludes, "she wound up being charged far more than the time she actually spent talking -- to the tune of some $900."
Howard of Madison, WI, wrote us in 2008 that "Since Oct 2007, I have received cell phone bills for more than $1000.00 a month from Sprint when my normal bill should be roughly 70.00 per month. I have called repeatedly and gotten promises that there would be credits and that they would correct the problems that caused my issues. (They are charging me for Text messaging and Data usage when I have unlimited for both!)"
But, he notes, "I have spent more than $4000 in cell phone bills since Oct 2007, and Sprint has done little to merely credit me for text usage and data usage. These are the only two elements that are being impacted, but both have cost me dearly."
FCC rules
As part of its announcement, the FCC suggested the following rules for wireless carriers to help prevent their customers from experiencing bill shock:
Over-the-Limit Alerts: Consumers that have limited bundles of voice, text, and/or data can incur expensive overage charges when their cap is exceeded. Without constant monitoring, these charges quickly add up -- particularly with "family plans" where multiple people share the same bundle.
The FCC's proposed rules would require customer notification, such as voice or text alerts, when approaching and having reached monthly limits that will result in overage charges.
Out-of-the-Country Alerts: Many American customers don't know that their "unlimited" minutes, texts, or data plans only cover use within U.S. borders. Consumers can see their bills skyrocket when they travel abroad because of the additional fees for "roaming" on a foreign mobile network.
The FCC's proposed rules would require mobile providers to notify customer when they are about to incur international or other roaming charges that are not covered by their monthly plans, and if they will be charged at higher-than-normal rates.
Easy-to-Find Tools: Many wireless providers use some technological tools to alert consumers about their bills. For example, iPad users automatically receive text alerts when they are about to go over their data limits. But these tools are not widely available and too many consumers don't know about them.
The FCC's proposed rules would require clear disclosure of any tools offered by mobile providers to set usage limits or review usage balances. The FCC is also asking whether all carriers should be required to offer the option of capping usage based on limits set by the consumer.
