NCL insulating consumers from ‘bill shock’ – National Consumers League

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Over the past month, NCL has filed two rounds of comments in the Federal Communications Commission’s proceeding regarding cellular “bill shock.” What is “bill shock,” and why is the FCC taking an interest, you ask? “Bill shock” describes consumers’ reaction to unexpectedly high wireless bills. The FCC released its notice in response to regulations adopted by the European Union that require wireless carriers there to provide notification to their subscribers when they are about to incur high fees for using their cell phones on a network other than that of their own carrier (known as “roaming”). Notification is also required when a European user is approaching their limits for other wireless services, such as texting or data usage.

The FCC is now considering instituting similar regulations in the U.S. After releasing it’s Public Notice on this issue, the Commission released statistics showing that 1 in 6 Americans (approximately 30 million people) have experienced “bill shock.” The headlines are also rife with stories of consumers getting the “shocks” of their lives when they open their cell phone bills and see four or five-figure balances staring them in the face. Here is just one of the examples we noted in our filing:

Wayne Burdick, an AT&T customer, received a $28,067.31 bill after he watched a Chicago Bears football game on his computer. At the time, Burdick was on board a cruise ship docked at a U.S. port. Burdick’s AT&T mobile broadband card had connected to the ship’s microcell rather than the local preferred tower. Because of this, Burdick’s data use was billed at extremely expensive roaming rates. Had his card connected to AT&T’s local tower, he would have been billed at normal rates. This problem was only resolved after Burdick contacted the Chicago Sun-Times, which in turn contacted AT&T on his behalf.

Had regulations like the ones in the EU been in place, Burdick would have received notifications from AT&T (likely via text message) that he was exceeding his data plan limits. AT&T would also have been required to shut off service until Burdick consented to the high rates he was being charged (or, more likely, finding a less-expensive way to watch his Bears game).

We believe that a solution like the one instituted in Europe would be a win-win for consumers and carriers. In the credit card industry, for example, consumers are routinely contacted by their credit card company if the company begins to see a pattern on unusual purchases on the account. The company may even block purchases until the consumer affirms that they — as opposed to a thief who had stolen then card — intended to make those purchases. Personally, when I was contacted by my card company in a similar situation, I was grateful that the credit card issuer took this step to make sure my account had not been compromised.

Similarly, we think that a notification and shut-off requirement would give consumers more faith in their cell phone companies. If a consumer who has never gone over their data limit suddenly starts racking up big overages, they would likely appreciate being asked by their cell phone carrier if they really meant to incur those charges, increasing customer loyalty.

Going forward, the FCC will review all of the comments submitted in this proceeding and decide what action (if any) to take. We, along with other public interest groups, the Attorney General of Massachusetts, and industry players support the adoption of EU-style regulations in this area. Stay tuned for developments on this issue!