WASHINGTON - U.S. Senator Tom Udall, D-N.M., is asking the Federal Communications Commission to take strong action to help protect consumers from sudden spikes in their monthly phone bills, or "bill shock," during their upcoming meeting.
"According to the FCC's survey of cell phone users, thirty million Americans - about one-in-six adult cell phone users - have experienced bill shock," Udall says in a letter to FCC Chairman Julius Genachowski. "This survey also found that, in one-in-four cases, the additional charges were greater than $100 dollars."
Udall recently introduced the Cell Phone Bill Shock Act of 2010, legislation to require cell phone companies to notify customers with a free e-mail or text message when they have used 80 percent of their monthly limits. It would also require the company to obtain consent before charging for services that are not covered by their regular monthly service plan.
This provision would prevent billing problems such as the Verizon Wireless "mystery fees" that are the subject of an ongoing FCC investigation. Verizon Wireless reportedly overcharged 15 million customers to the tune of tens of millions of dollars. According to news reports, some customers were charged $1.99 whenever they inadvertently pressed a button on their cell phone that launched a Web browsing service that was not included in their monthly plan.
In his letter, the senator notes that the FCC survey that found almost 85 percent of American consumers who suffered bill shock were not alerted when they were about to exceed their allowed phone usage.
As such, he is encouraging the chairman to consider the notification and customer consent principles in his legislation to help consumers avoid unwittingly exceeding their monthly limits for voice limits, text messages, or data usage during their Oct. 14 meeting.
"In many cases, a simple alert message would help consumers avoid bill shock and overcharges," Udall says.
Cell phone bill shock has become more common with the increased popularity of smartphones like BlackBerries and iPhones that have made it easier for Americans to exceed their service limits without knowing it. Examples cited in recent news reports include the case of a Navy ROTC midshipman who mistakenly left his smartphone's roaming function turned on while he was abroad - and returned home with a bill for almost $1,300. In another case, a teen's cell phone data usage led to a $22,000 bill for mom and dad, and another man was billed $18,000 for a six-week period when his son used a cell phone to connect a computer to the Internet.
The European Union already requires wireless phone companies to provide similar notifications to their customers when they have reached 80 percent of their monthly data roaming services.
Udall's legislation has been endorsed by over 25 groups, including Consumers Union, which publishes Consumer Reports magazine, and the National Association of Regulatory Utility Commissioners.
Below is the full text of Udall's letter to Chairman Genachowski.
October 7, 2010
The Honorable Julius Genachowski
Chairman
Federal Communications Commission
445 12th Street, SW
Washington, DC 20554
Dear Chairman Genachowski:
I am writing to urge that the Federal Communications Commission take strong action to protect consumers from cell phone "bill shock."
According to the Commission's survey of cell phone users, thirty million Americans-about one in six adult cell phone users-have experienced "bill shock," or a sudden spike in their monthly phone bill when they have not changed their service plans. This survey also found that, in one in four cases, the additional charges were greater than $100 dollars. News reports highlight outrageous examples such as the parents of one teen whose cell phone data usage led to a $22,000 bill and another man who was billed $18,000 dollar for a six-week period when his son used a cell phone to connect a computer to the Internet.
The increased popularity of smartphones like BlackBerries and iPhones make it easier for Americans to exceed their service limits without knowing it. This is especially true for those who share multiple phones as part of a family plan. Although consumers can already access their phone usage by requesting this information from their cell phone provider, the Commission's survey found that almost 85 percent of American consumers who suffered bill shock were not alerted that they were about to exceed their allowed phone use.
In many cases, a simple alert message would help consumers avoid bill shock and overcharges. That is why I introduced legislation, the Cell Phone Bill Shock Act (S.3872), to require that cell phone companies notify customers, free of charge, when they have used 80 percent of their limit of voice minutes, text messages, or data usage. My legislation would also require cell phone companies to obtain customers' consent before charging for services not included in their monthly plan.
Consumer advocacy groups such as Consumers Union, the publisher of Consumer Reports magazine, endorse the notification and customer consent provisions of the Cell Phone Bill Shock Act since there are currently no requirements protecting American consumers from being caught off guard by unexpectedly high cell phone bills. Cell phone companies in the European Union, however, must already send similar customer notifications and obtain consent for roaming charges.
I am pleased that the Commission opened a Notice of Inquiry related to cell phone bill shock. As the Commission further examines this issue at its October 14th meeting, I encourage you to consider the notification and customer consent principles of the Cell Phone Bill Shock Act in order to help consumers avoid bill shock.
Thank you for your consideration and reply. I look forward to working with you on this important consumer protection issue.
Sincerely,
Tom Udall
United States Senator
