Nobody likes the unpleasant surprise of unexpectedly large mobile phone bills, a phenomena known as “bill shock.” Now, after some prodding by the Federal Communications Commission and the Consumers Union, the wireless industry is finally going to give customers some advance notice before they hit the monthly limits of their service plans in text, talk minutes or data usage.
The new “Wireless Consumer Usage Notification Guidelines,” unveiled Monday by CTIA, the wireless industry association, are voluntary standards put in place by the nation’s wireless companies.
Accordingly, wireless companies are now compelled to provide customers with free alert messages before and immediately after they’ve exceeded the pre-paid limits of their plans. The initial two alerts are scheduled to go into effect by October 17, 2012. Then the companies will step up the warning to four alerts (two before, and two after the limit is reached) by April 17, 2013.
The FCC and the Consumers Union, both of which have called for such alerts since last year, are also reportedly collaborating on a website that will provide customers with more information about the alerts system and their legal rights.
“Last year, the FCC identified a growing problem known as bill shock and took important steps toward a solution, which led to today’s victory for more than 97 percent of wireless consumers,” said FCC Chairman Julius Genachowski, referring to survey results released by the agency in April 2010, which found that 30 million Americans, or one-in-six mobile users, had experienced bill shock.
The FCC’s proposed solution to the problem, a set of legally binding rules for carriers floated in October 2010, has been put on hold while the agency determines if the new voluntary standards have a meaningful impact. (It’s worth noting those rules, which are generally similar to the voluntary ones, have also been criticized as ineffective.)
Survey results by the Consumers Union put the number of “bill shock” sufferers even higher, at 20 percent of all U.S. mobile subscribers.
“Consumers have been telling us about ‘bill shock’ for a long time, and we’ve been pushing for reforms to crack down on the problem,” said Parul P. Desai, Policy Counsel for Consumers Union, in a statement. “We’re encouraged that the industry is offering to provide free alerts to help customers avoid ‘bill shock,’ and we urge them to do it as quickly as possible.”
Reached by phone, Desai was just as optimistic about the new guidelines, though she was also careful to explain that there was still a lot of work to do: Each wireless carrier will be responsible for providing its own alert system, eliminating any hopes of uniformity across the industry.
The wireless companies haven’t shown any of their new alerts off to the Consumers Union, either. And the FCC, which seemed so keen to declare Monday’s news as the victory it had one for consumers, is taking the lead on developing the new website to inform consumers about the new system. Yet the agency hasn’t shared much in the way of its concerte plans for the site with its partner, the Consumers Union.
“The details [of the website] are still being worked out,” Desai told TPM. “Part of our role is making sure that information continues to be available on the website. But it’s nothing that I can elaborate on right now.”
And as far the danger of companies not complying with what are voluntary, self-imposed standards, Desai pointed out that certain carriers, including the nation’s largest, Verizon, already offer bill shock alerts, though their reliability remains questionable.
“Our hope is that the carriers will comply,” Desai said. “We hope that these alerts will be implemented as soon as possible and we’re urging the industry to do just that.”
