5 Tips to Avoid “Cell Phone Bill Shock”

The FCC – the Federal Communications Commission – should think about changing its name to the Federal Cell Phone Commission. Because this month, FCC officials have come down hard on cell phone providers. And with good reason.

It all started Oct. 3, when FCC Enforcement Bureau Chief Michele Ellison announced [PDF] that her department had spent much of the past year was investigating Verizon Wireless for “mystery fees that appeared on Verizon Wireless bills, costing over 15 million Americans tens of millions of dollars.”

The result of the investigation? Verizon admitted it overcharged and is paying back those customers. Apparently, a software glitch caused Verizon to charge millions of customers $2 to $6 extra in data fees – even though some of them had never even signed up for to data plans. The reimbursements will show up on this month and next month’s bills.

But Ellison says the FCC isn’t done yet…

“We’re gratified to see Verizon agree to finally repay its customers. But 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. The Enforcement Bureau will continue to explore these issues, including the possibility of additional penalties, to ensure that all companies prioritize the interests of consumers when billing problems occur.”

Only two weeks after the Verizon situation, and perhaps prompted by it, the FCC released a cell-phone survey [PDF] with some disturbing statistics…

• “17 percent of American adults with a personal cell phone said that at one time their cell phone bill increased suddenly from one month to the next, even though they had not changed their calling or texting plans.”
• “88 percent said their cell phone company did not contact them after their bill suddenly increased.”
• “84 percent said their cell carrier did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads.”

Around the same time, the FCC announced [PDF] it was proposing new rules to prevent this sort of thing from happening again. Those rules will require cell phone companies to tell customers when they have reached their monthly usage limits. Here’s how it would work…

1. Over-the-Limit Alerts: Your provider would be required to notify you, possibly by voice or text alerts, when you get near or reach your monthly limits and will start getting hit with overage charges.
2. Out-of-the-Country Alerts: Same thing goes for when you’re traveling overseas and you get hit with those expensive “roaming charges” that aren’t covered by your monthly plans. You’ll need to be told if you’ll be charged at higher-than-normal rates.
3. Easy-to-Find Tools: Your provider would be required to give you “clear disclosure of any tools offered by mobile providers to set usage limits or review usage balances.”

Before the end of the month, expect the FCC to announce a public comment period, during which time you can make your opinion known. But some folks are already weighing in. Consumers Union, the nonprofit publisher of Consumer Reports magazine, praised the FCC’s plans.

“People are being blind-sided by unexpected charges on their wireless phone bill,” declared Ellen Bloom, senior director of federal policy for Consumers Union. “Smartphones have become much more sophisticated, so we ought to have a more sophisticated way to tell people they’re about to go over their limits.”

Bloom said the proposed rule will combat what she called “cell phone bill shock.”Bloom said Consumer Reports conducted its own survey in September, and it backed up the FCC’s findings. The biggest revelation? One in every five adults received a cell-phone bill in the past year that was much higher than they expected.

“The FCC’s proposal would help consumers by requiring wireless companies to warn their customers before and when they reach their limits,” Bloom said. “You would get a notice, such as a voice or text message, when you’re coming up on your limit. Consumers need better tools to keep track of their accounts, and this proposal is a simple, effective solution.”

Five ways to avoid the shock

Until and unless the FCC succeeds in its quest to require warnings, its Consumer Task Force has these recommendations…

1. Understand your “calling pattern” and ask your carrier for a plan that would be best for your kind of use.
2. If you don’t make a lot of calls, consider a pre-paid plan. Because you pre-pay, you can’t go over your limit.
3. If you’re going to use your cell phone outside the United States, find out beforehand what charges may apply. (The FCC offers more advice about this at Wireless World Travel.)
4. Finally, you can even ask your carrier to help you avoid bill shock – with phone or text alerts or by letting you monitor your account online.
5. If you’ve tried to resolve a billing issue with your carrier and couldn’t reach a fair compromise, complain to the FCC. Call the FCC Consumer Center toll-free at 1-888-225-5322 or file a complaint online.