Cell phone carriers and FCC reach agreement over bill shock

Monday, October 17th, 2011 By

a cellular phone

Cell phone users be getting notified of going over their coverage. Image from Wikimedia Commons.

Many people have opened a bill from their cellular phone company to discover it’s drastically inflated; this is often called “bill shock.” Federal regulators and cellular carriers have reached an agreement to let people know in advance if they are due to get a big bill.

Cell phone bills got attention from Feds

Last year, the Federal Communications Commission starting investigating incidents of “bill shock,” or disturbingly high bills from cellular phone carriers that consumers had no idea they were in for. The FCC sys cell phone carriers should warn their customers first.

According to Daily Finance, an FCC study found one in six cell phone users experienced some bill shock. Of those, 23 percent reported a $100 cell phone bill or higher.

Of people who filed bill shock complaints with the FCC, 67 percent were regarding a bill for $100 or more and 20 percent were complaints of cell phone bills for $1,000 or more, according to ArsTechnica.

Among the most egregious bills was an elderly woman in Massachusetts who received a bill for $18,000, according to Daily Finance, and another person got a cell phone bill for $68,505.

Carriers and regulators reach agreement

According to the Los Angles Times, the Federal Communications Commission and the CTIA, the trade organization for the wireless communications industry, reached a voluntary agreement to begin notifying consumers when they are in danger of incurring extra charges on cellular phone bills.

Within one year, consumers will receive a voice or text message alerting them if they are close to or exceeding their monthly coverage for two of the following: voice, data, text and international coverages. In 18 months, alerts will be sent out for all four types of coverage. The service will be provided for free and customers can opt out, according to Daily Finance.

CTIA president and former Seattle Seahawk wide receiver Steve Largent hailed the agreement as an example of how business and government can work together to reach agreements without needing legislation or regulation. The FCC was in the process of enacting a rule concerning bill shock.

Industry code amended

The CTIA, which represents almost all of the cellular phone industry, amended its code of ethics on its website to include Wireless Consumer Usage Notification Guidelines, meaning that CTIA members will notify their customers when they are close to exceeding their allotted coverage.

Members of the CTIA include AT&T, Sprint, Verizon and T-Mobile, the carriers for 90 percent of the nation’s cellular phone users. Smaller carriers such as US Cellular and Clearwire also agreed to the new guidelines.

Though the CTIA insists “bill shock” is not very widespread, consumers disagree. According to CNN, the FCC found that 84 percent of “bill shocked” consumers received no warning and 88 percent got no statements from their wireless carriers when they did go over. According to the Los Angeles Times, 60 percent of respondents in a Consumers Union poll were in favor of regulation curtailing “bill shock.”

Sources

Daily Finance

Ars Technica

Los Angeles Times

CNN

Previous Article

« Millions of dollars wasted by Social Security fraud

Millions of people rely on Social Security payments to sustain them after they have stepped away from the workforce. Money draws fraud artists like moths to a flame, and millions of dollars go down the drain annually due to Social Security fraud. Millions paid out to dead people The Social Security Administration [...] A cemetary
Next Article

Are dognappings yet another sign of uncertain financial times? »

Desperate times lead to desperate measures. And, although national crime has gone steadily down each year, one crime seems to be on the rise — dog theft. Some find the trend indicative of the poor economy. Others cite more mundane reasons and warn against jumping to conclusions. Ransom demand for bulldog Jennifer [...] cute and little