The Federal Communications Commission and major wireless carriers today announced new guidelines for warning consumers when they're at risk of incurring unexpected charges on their cell phone bills. Dubbed "bill shock" in a 2010 FCC report, the phenomenon generated hundreds of consumer complaints to the FCC that year.
The unexpected charges can crop up when consumers exceed the caps for their voice, data, or texting plans, or when they incur high roaming charges while traveling overseas. Earlier this year, the wireless industry insisted that consumers just needed to do their homework in order to avoid such surprises.
But the FCC used the threat of formal regulation to get wireless carriers to change their tune. The top four carriers—Verizon, AT&T, Sprint, and T-Mobile—have agreed to "voluntarily" adopt the new rules within the next 12 to 18 months. They will automatically warn customers, likely via text messages, when they're on the verge of incurring unexpected fees.
Speaking at the Brookings Institution on Monday, FCC Chairman Julius Genachowski recounted several "bill shock" horror stories, in which consumers unknowingly incurred thousands of dollars in data roaming fees after taking their smartphones overseas.
Genachowski said that he is suspending the formal FCC rulemaking process pending wireless carriers' implementation of the "voluntary" agreement. The FCC will work together with Consumers Union to create a website to collect information about carrier compliance.
Parul Desai of Consumers Union endorsed the agreement, but she encouraged firms to accelerate the introduction of the alerts. She also praised the FCC for leaving its formal regulatory inquiry open as a way to prod wireless carriers into compliance.
The agreement won kudos from President Obama, who issued a statement praising wireless carriers for their "willingness to work with my Administration" in crafting the plan.
Listing image by Photograph by Wayan Vota
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