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Monday, April 22, 2024 | Back issues
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New FCC Rules Tackle|Cell Phone ‘Bill Shock’

WASHINGTON (CN) - The Federal Communications Commission proposed new rules on Thursday aimed at taming cell phone "bill shock," or unexpected overage and roaming charges on cell phone bills. "Companies should compete on value price and service, not consumer confusion," FCC Chairman Julius Genachowski said at an agency meeting.

The FCC receives an average of 1,500 consumer complaints a year about bill shock, officials said. The agency received 764 complaints in the first six months of 2010, of which 20 percent involved overages of $1,000 or more, and eight complaints were for $10,000 or more.

Consumers often rack up unexpected charges when traveling internationally, using Wi-Fi without realizing it's charging their data plan or receiving high per-minute charges after exceeding their plan limits.

"It's a simple idea: People should be told that they're risking extra fees before they incur them," Genachowski said.

The Government Accountability Office reported that 34 percent of wireless phone users who pay their own bills received unexpected charges in 2008 and early 2009. The GAO put wireless companies on notice, but "unfortunately, the industry has not responded in a sufficient and uniform manner to address these issues," FCC Commissioner Mignon Clyburn said.

An FCC survey in April and May 2010 found that 17 percent of all Americans, or about 30 million people, experienced a sudden increase in their bill even though they made no changes to their calling or texting plan.

"The financial impact can be large," said Joel Gurin, chief of the FCC Consumer and Governmental Affairs Bureau. But FCC Commissioner Robert McDowell said businesses may also pass on the costs of new government mandates to consumers, which officials considered when crafting the proposed regulations.

Rebecca Herschel, attorney for the FCC, said the fact that the measures are relatively simply and technology-based lowers the cost for carriers.

The FCC's new rules would require wireless carriers to send automatic usage alerts, via text or phone call, to consumers who are approaching text, voice, and data plan limits or about to incur roaming charges. Similar measures are already in place in the European Union.

Many consumers are not aware that you can currently set voluntary usage caps and monitor your usage, the officials said. The new rules will require "clear and ongoing disclosure" of these options, they said.

But bill shock remedies do not have to come from the government alone, McDowell said.

"There's an app for that," he said.

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