A study commissioned by the Federal Communications Commissions (FCC) in 2010 found that one out of every six American's have experienced "bill shock" at one point or another. About a third said they received bills that were $50 higher than they expected, and nearly a quarter said it was by more than a hundred bucks. The FCC, along with the CTIA and Consumers Union, will try to make bill shock a thing of a past by implementing industry wide changes designed to keep wireless users better informed.
At first glance, a new study commissioned by the wireless industry seems reasonable. The study was done by Recon Analytics based on data acquired by Neilson Company. The numbers indicate that only 0.3% of US wireless customers would benefit financially from switching to a higher voice plan, rather than paying occasional overages. Sure, the numbers don't lie, but it’s the final conclusion of the reports that's got us scratching our heads.
Jose Rivera is a U.S. solider currently deployed in Afghanistan. He's also the father of a newborn baby, and husband to a wife being treated for heart trouble. English isn't his first language, and according to CNet, all of these factors played a role in racking up a $16,000 cell phone bill with AT&T.
Cell phone bill shock isn't a new phenomenon, and in Rivera's case, it appears he was confused about a $4.95/month add-on that he was told would allow him to make international calls to his wife. But what he didn't understand is that those calls would cost $5/minute, and about 50 cents per text message.
"While he should have realized that $4.95 a month was probably too good to be true, he is a young soldier with minimal experience with phone plans or overseas travel," said Capt. Evan Brainerd, Rivera's commanding officer.
Brainerd decided to fight on Rivera's behalf and claims that no one at AT&T ever warned the young soldier about his fast growing phone bill.
Hit the jump to see what AT&T has to say on the matter.
The Federal Communications Commission is getting ready to make its pitch for new rules that would require mobile phone companies to send out voice or text messages to subscribers once they've reached their limit, and warn them that extra charges would then apply.
FCC chairman Julius Genachowski has been fighting to eliminate so-called "bill shock" for some time now, which not only covers the above scenario, but also hidden charges and when customers are about to be hit with roaming charges.
"The data is clear that there is a significant consumer issue," Genachowski said during a recent interview. "The solution is a 21st-century solution -- one that is workable, one that is non-burdensome, and one that is a terrific example of a 21st century consumer policy."
As you might imagine, wireless providers aren't on board with any potential new legislation. Verizon, for example, did admit that consumers should have access to their wireless usage, but added "intense competition has led wireless carriers to provide consumers" with the "tools that allow [them] to monitor and control their usage in various ways."
Nevertheless, the FCC continues to field complaints from consumers bemoaning unexpected charges, which sometimes comes out to thousands of dollars.
"Most people still don't know what a megabyte is," Genachowski said. "So it's hard to expect them to know when they have reached their limits."
Should wireless carriers be required to send a text or voice message to consumers when they've reached their monthly limit, or does the onus fall completely on the consumer to keep track of, and understand, their mobile plan?
You've probably heard the horror stories, maybe you've even experienced it yourself. The cell phone bill comes, and it is unexpectedly massive. Huge overages happen more than expected, so much in fact, that it's been given a name: "bill shock". The FCC received 764 complaints in just the first 6 months of the year, and a survey showed that 30 million Americans have experienced this. Now it looks like the FCC might be about to take action.
According to FCC Chairman Julius Genachowski, the agency will propose rules tomorrow that will force the carriers to alert users via voice or text when they are about to go over their plan's limits and incur extra fees. The carriers are not particularly pleased with this possibility. The VP of CTIA ( an industry trade group) said in an interview that, "The industry continues to develop tools to keep customers informed about their level of usage." He also cautioned against " prescriptive and costly rules." We're not sure what needs to be developed. SMS works just fine as it is.
Some customers have ended up being stuck with bills in the tens of thousands after traveling, or changing their plan. Wireless carriers often end up cutting them a deal, but still ask for substantial sums of cash. The FCC has intervened in some of these incidents, but if new rules are adopted this problem could go away altogether. Have you ever had a case of bill shock? Let us in on the sordid details.
Verizon is attempting to make good with some 15 million customers who may have been the victim of "mystery charges" for data services they never intended to use. In a statement earlier this week, Verizon apologized for the SNAFU and promised to issue refunds for the "mistaken past data charges," and when all is said and done, the refunds could add up to between $50 million to $90 million.
That's all well and good, but the FCC still has some unanswered questions about the whole ordeal.
"Questions remain as to why it took Verizon two years to reimburse its customers and why greater disclosure and other corrective actions did not come much, much sooner," Michele Ellison, FCC enforcement bureau chief, said in a statement. "The enforcement bureau will continue to explore these issues, including the possibility of additional penalties, to ensure that all companies prioritize the interest of consumers when billing problems occur."
Depending on how this all plays out, other wireless carriers could face investigations as well for similar customer complaints ultimately resulting in "bill shock."
Word to the wise, make sure you know exactly what your mobile apps are doing and how they operate, lest you discover when it's too late, like after being hit with phone bill saying you owe $7,763.70. Such is the predicament Canadian resident and iPhone owner Jason Boutang finds himself in.
Our first thought was, 'How many 900 numbers did this guy call?,' but it wasn't a sexy voice on the other end of the line that drove up his phone bill, it was a translator application he used during his European trip. Not thinking anything of it, Boutang fired up the app to help him communicate with the French and streamed a Calgary rock radio station for five hours over three days. Sounds innocent enough, but because both required Internet signals, Boutang's Virgin Mobile bill quickly shot up.
"They pulled the plug on me after the third day," Boutang said, who initially thought it was related to roaming charges. "I opened my e-bill and fell over. I had to get three other people to look at the screen to make sure I read it right. I kind of figured it was from the trip 'cause my average bill is about $200 a month."
According to Boutang, he called up Virgin Mobile to see he could get the charges dropped or reduced, but so far hasn't had any luck.
"They said, 'pay up every penny ... you went outside your neighborhood, you pay the price,'" Boutang said.
According to Canada's CNews outlet, Virgin Mobile is looking into the situation to see if they can lessen the charges. In the meantime, Boutang is pleading ignorance, saying the customer service rep who sold him his iPhone never warned him about the costs of using the device abroad, nor was he informed of any roaming data plans.
Is Boutang a victim of the system, or simply guilty of not doing his homework? Hit the jump and sound off.
It's a good idea to closely monitor your monthly cell phone usage, especially if you're on a family or some other kind of shared plan. Otherwise, you could end up with "bill shock" at the end of the month. As the FCC tells it, one out of every six Americans has been caught off guard with a higher-than-expected cell phone bill.
This stat comes as part of an FCC-commissioned study in which it was discovered that some 30 million Americans have been surprised at their phone bill. Out of those, 33 percent said their bill was $50 more than what they were expecting, while 23 percent said it was more than $100.
The FCC wants put into place new rules in the mobile phone industry that would prevent bill shock from happening, such as requiring carriers to notify customers when their cell phone bills start to get out of whack. In the meantime, treat the study as a reminder to keep tabs on how many minutes you and your family are chewing through every month.