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Consumer View: Stop the Shock

May 11th, 2010 by Joel Gurin - Chief of the Consumer and Governmental Affairs Bureau

It could happen to anyone, and it happened to me.  Last year, I took on a consulting job that involved working out of town. Without realizing it, I began using my cell phone more frequently and for longer conversations.  By the time I caught the problem, my monthly bill had gone from about $300 a month to well over $500, two months in a row. I worked out a compromise payment with my carrier and changed to a plan with more monthly minutes. I had learned about bill shock first-hand.

Bill shock – surprising jumps in cell-phone bills that happen without warning – is a common and serious problem. The FCC’s Consumer Center receives complaints all the time from people whose bills may double or triple, going up by hundreds of dollars in a single month. Sometimes cell-phone carriers contact customers when they see an unusual calling pattern, as mine did, to their credit. Often they don’t, and the bills go up.

Bill shock has been a major problem in Europe, where you can go into an international calling zone, at international rates, with as little effort as it takes Americans to drive from one state to another. The European press has reported many cases of bills reaching thousands of Euros.  Now the European Union has taken action. Cell-phone carriers in Europe are now required to alert their customers when they’re approaching the limit of their calling plans. This simple solution, which has just gone into effect, should be a practical way to prevent bill shock. At the least, it will ensure that every customer has fair warning.

Today the Consumer and Governmental Affairs Bureau of the FCC issued a Public Notice asking if there are any reasons that the European solution can’t be used in America, and inviting comment on other ways to prevent Bill Shock. This action is one of the first initiatives from the FCC’s new Consumer Task Force. Please let us know your thoughts on how to “stop the shock.” Here are some links to get involved:

• Read our Public Notice and press release
• Learn tips for avoiding bill shock
• If you’ve had a problem with bill shock that your carrier hasn’t resolved, you can reach our Consumer Center at 1-888-CALL-FCC (225-5322) or file a complaint online.
• Comment on the Public Notice for the record (Proceeding #09-158).
• And if you have a general comment on the subject, please add it to this blog below.
 

 

30 Responses to “Consumer View: Stop the Shock”

  1. 1HotZ28 says:

    To AT&T's credit - my daughter did the same to me. Her friend at work left on a maternity leave and my daughter was calling her daily to keep in touch. The next bill was an additional $600 in excess airtime. I called AT&T and explained what happened and they upped my basic airtime package to cover the actual minutes used and then backdated it for one month to cover the overage - and additional $40 per month airtime and it covered the $600 overage. Thank you AT&T - I was able to sleep at night again.

  2. Guest says:

    Don't worry folks, just like ever other government bureaucracy, the FCC will have no way of monitoring, measuring or enforcing the regulations and will instead allow you to continue to get screwed by the telco lobbyist that own Washington. Just like the bank regulators failed to protect your investments during the 2007-2008 crash, just like the oil regulators (MMS) were doing lines of cocaine and having sex with the very people they were tasked with regulating before the BP oil spill, just like the SEC regulators were downloading porn from their work computers for 8 hours a day during the meltdown, the FCC will fall well short of their goals and woefully disappoint because there is and always has been absolutely no accountability of our Federal Government.

  3. Guest says:

    What happened to accountability on the user's end? If we are going over the amount of minutes or texting that we are paying for, why shouldn't we have to pay above and beyond? It isn't the carrier's fault that this happened. Of course, sometimes life happens and things are out of our control, but these big companies have a lot of customers and they have to watch over all of them now? Most of the time people don't want to take a higher plan b/c of the cost, but then what happens? They go over and have overage, but yet, don't want to pay. It's time for some people to take responsibility.

  4. Guest says:

    A text message is a great idea. This should be the case for roaming charges as well. An automated message shouldn't be too hard for the wireless companies. The onus is also on the consumer to type #min periodically especially if you have a small amount of mins.

  5. woodshed says:

    1HotZ28's solution by ATT could be a good way to solve the problem. The consumer chooses a plan at $xx per month for xxx minutes. If the consumer were to exceed those minutes, they would be bumped up to a higher but reasonable rate for an extra xx minutes. If they exceeded those minutes, they would pay another slightly higher rate for more minutes. Many electric utilities and water companies already do this in their rate structures. then the customers can use whatever amount they want, and they know that they are paying a fee for incurred cost of use ahead of time. The Cell companies would have higher costs if everyone used lots of minutes, because more customers would be eating up their bandwidth, possibly causing them to have to expand their infrastructure. But by covering costs, and having higher rates for the extra use, the cell companies could be generating income monthly to grow their services. But don't allow them to gouge us any longer.

  6. Guest says:

    Verizon been notifying their customers for years ---- but does anybody who doesn't check on their own really pay attention --------- nahhhhhh.
    every phone has a time counter built in --- every company gives you acces to check what you have used for free at any time from them

    WHEN ARE PEOPLE GOING TO BECOME RESPONSIBLE FOR THEIR OWN ACTIONS

    are we going to make car manufacturers call us when it's time to get gas, or maybe tire makers when we'll need tires (to avoid risk or towing expenses)

    Americans are such babies who need to so coddles and have their nose wiped its pathetic ---- always blame someone else - always someone else's responsibility - always an excuse .....
    Grow up be an adult ...............................get a plan that fits you needs and budget and live within it ...................................... No I do not work for a phone co .... I don't work 'for' anybody ............................

  7. Guest says:

    I've been a Verizon Customer since 2001. This is a practice they USE to implement. However they no longer advise when you are approaching your plan maximum nor do they adjust your bill for past month's usage. Which was another service they use to provide. Over all I am very pleased with Verizon however adding these two features back would further boost great customer satisfaction and longevity. Also become very familiar with MyVerizon as you do not have to pay to block calls & text messages.

  8. Guest says:

    Totally in favor of this very simple and fair measure, but will it have teeth?

  9. Guest says:

    Any company should exhibit some common sense when it comes to its customers. Unfortunately, it has to come to federal regs to police the abuse of these aggravation teams who dream up ways to shock the consumers to reap more. Although AT&T has zeroed out my enormous bill of nearly $3,000, the damage has been done. After several "reviews" of my account (nothing in writing) and no formal due process (process was hidden in a website), my account went to collections, which affected my credit. Because of recent court decisions in arbitration provisions, consumers are now able to obtain more fair and just outcomes in dispute resolutions.

  10. Guest says:

    Well, good for all of you that had their massive charges zeroed out. I am frankly jealous. My daughter had dubious charges (in addition to the per minute charges) added to her international calls--the infamous data roaming charges. I have a bill of nearly $4000. I paid the amount they asked me to pay and they shut off her phone with NO notice BEFORE the bill was due. I have now filed an FCC complaint. I had good credit with AT&T and would have paid the charges if explained to me. Now, their shutting off of her phone leaves me not only really angry, but with 0 motivation to make this my first bill paid. AT&T LIED about keeping the phone active, and my disabled daughter was caught with no cell phone to use. I loathe liars and people who go back on their word. Some people just go hog wild with usage, in other cases, such as international calls, roaming and data charges are not properly disclosed and add up very fast. I will do everything in my power to have the full cost of international charges disclosed up front and to have a shut off provision for high usage, such as the EU plan, above. Of course, they used the EU cell towers and carriers, so I don't buy that that didn't know about the high usage until it was too late. How in God's name did you get your company to zero out a $3000 bill? Instead, I got a dead IPHONE after years of excellent payments. I guess the fact that I am an attorney will help with making cell phones consumer friendly. Please post your stories--I continue to be shocked yet receive some odd comfort from knowing that other people's kids came back from Europe with incredible charges.

  11. Balance says:

    Certainly there is room for some balance. It is the responsibility of the consumer to know what is included in the plan and to stay within those guidelines, and at the same time it is good business practice for the companies who provide the service to assist with that. For a really long time my 250 texts per month were adequate, and I did not put much thought into it. Then one month there was an extra $40 for text messages on my bill. I took responsibility and just paid the cash - but I then called and changed my plan so that I would not have any issues in the future. I like the idea of being "warned" that one is getting close to limits, but it makes me sad that we have to regulate such a thing rather than the consumer and the company providing the service looking out for each other.

  12. Guest says:

    The ultimate responsibility to monitor usage is the consumer's.

    However, when you have a family share plan, monitoring the usage gets dicey and time consuming. Verizon does provide you with a usage "meter" (there is an archaic method for minutes only, if you visit their web site. Many of the features/services mention above are now for ala carte, or for fee.

    Many carriers are following the ancient and current service practices of banks -- wanting US, the consumers to adjust, add/remove features ourselves on-line - charging for services made via representatives. However, we do not always get all of the information on-line, nor do we really understand what we are doing - or worse, what are the consequences should we ever go over the plan's allocation.

    If the carriers want us to be partners in controlling the costs, they must provide us with all of the tools - and full disclosure of both the pros and cons, and not in a 14 paged dissertation. Above all, the carriers must abandon the banking style of customer service of partial control, hidden costs, etc.

  13. Guest says:

    do like metro pcs did have unlimited text and mins and unlited web for 40 dollars for 1 phone and 3 lines for 100 dollars i would go to them tomorrow but i have a contract with verizon and metro does not have enough towers to cover the area i would use a phone

  14. Guest says:

    We all need to be more proactive before getting hit with a bill and then crying fowl against a company for charges we legally incur. It is not the company's responsibility to tell you if you are over your minutes. If you kid is going to Europe or you suddenly are using your phone more check to make sure your plan covers it. My son overtexted one month and I got hit with $60 in overage charges. I paid the $60 and upgraded my plan.

  15. Guest says:

    I agree that it's up to the customer to know what is on their plan and what isn't. However I do think that home phone, cell phone, and cable companies do practice price gouging on a regular basis. Something that would be illegal in another industry. If, for example, your electric company charged you double or triple what they normally would charge if you went over a certain threshold you would be pretty upset right? Well, this really happened...

    I have an international plan on my home phone for five dollars a month. With this plan I can call anywhere in Europe for two cents a minute. When my grandmother passed away I no longer felt the need to keep this plan so I canceled it. I had a friend staying with me for a short time and she asked if it would be alright to make a call to Germany. I knew that I no longer had the plan, but I decided that even if it's $.25 a minute it wouldn't be that expensive. She offered to run to the store and replenish her international calling card. I said, no that's okay it's not necessary. If she talked for an hour it would only cost maybe 15 or 20 bucks.

    When I got the bill the following month I was shocked that they had charged me four dollars per minute! That one-hour phone call cost $240!

    That is a 200% markup... really? Come on... that is just ridiculous.

    I managed to get it taken care of, but it took four months. Who's going to pay me for my lost time?

  16. Guest says:

    I'm sorry... I meant a 20,000% markup! Really? Really...

  17. Guest says:

    Also beware of the providers when you change your plan in the middle of a billing cycle. With Verizon, you can choose the date to make the change effective, but when you allow them to pro-rate your bill, you better get afraid!! I just got caught in the trap, didn't see the date change box in the fine ptint, and BAM, a $400 bill. I knew I was short on minutes, but when they pro-rated the bill, they showed me going WAY over my plan allowance and I get trapped. After a lot of complaining, they did make some adjustment but what a pain in the backside. No wonder there are more complaints about cell providers than any other type of business.

  18. Guest says:

    It doesn't have to be so outragious. If the cell phone companies were required to have graduated rates similar to many utilities-electric or water-they could come up with something much more fair to the consumer and still have good income for the use of their bandwidth.

    Example: Customer signs up for a plan with 500 minutes for $50 (hypothetical numbers). If he stays within those minutes, everyone is happy. But if he goes over, currently he will get raked over the proverbial coals at a cost per minute--$0.40 or more. Same with text.

    But, what if they had a graduated scale that covered costs but also reimbursed the cell company at a better rate? The cell companies need to build in an auto-warning program that would notify the customer that he was approaching his limit. Those programs are available for use, some for free, so why not build them into the package offered the customer? Here is a hypothetical example with sample rates.
    First 500 minutes @ $50 ($0.10 per minute)
    Next 100 minutes @$15 ($0.15 per minute)
    Next 200 minutes @ $50 ($0.25 per minute)
    And so forth.

  19. Brian Mastenbrook says:

    Why are carriers allowed to charge overages that greatly exceed the per-unit cost of the basic plan? As an example Verizon's mobile broadband service charges $60 per month for the first 5GB of data. If you exceed this plan by another 5GB, the overage costs $256. Does the second 5GB of data really cost four times as much as the first 5GB? I can't see how. It's just a way of taking advantage of customers who exceed the limits of their plans.

  20. Adrian Bye says:

    How about the FCC starts fining the carriers when they do this? They're just being bullies and its time they were brought into line.

  21. Guest says:

    We once had a cell phone bill for our son that was over $3000. It was definitely a shock. Fortunately, the phone company (Verizon) was very understanding and wrote off the fees. At the same time, they offered to block text messaging and data usage since those weren't on our plan. I was surprised that the default for these charges was always on unless the customer specifically requests they be blocked. If I wanted them, I'd pay for them. It might be helpful to actually make the default on these off. That wasn't clear in the plan language or on the phone.

  22. Guest says:

    I'm still wondering how my $29.99 cell phone service from AT&T has jumped to $100 a month. I wasn't given any warning by the salesperson at all. All she kept saying was that the cost is low. The really suckered me in. Not that I don't get the service I want, but just that there are all kinds of hidden fees that they never mention. Most of their services are low for just a few months, apparently. I think its about time someone did something about this because, to me, not telling a customer something is as bad as deliberatly lying to them.

  23. Guest says:

    A year ago I added my roommate and her 26-year-old son to my Verizon plan. The shared plan would be about $125; the three of us would split the bill. Each of us were allowed 250 text messages. The son went way beyond the limit, unknownst to me. My first bill was about $800. Since that bill arrived halfway into the next billing cycle, there was already another $300 accrued. I paid the bill and removed all texting service from his number. Since then, I have learned that carriers often make adjustments in such cases. It would have been wonderful if Verizon had offered that. I am definitely in favor of the bill; a simple and inexpensive text from the carrier would have saved alot of pain and money for us, and added to our goodwill toward Verizon.

  24. Guest says:

    I'm very happy to see that this video clip was captioned so I could watch it at work without disturbing others. This is a big topic and we should require carriers to call people when their bills jump unexpectedly. The gas credit companies do this as do other companies, so why not the telecom guys?

    Julie, Washington DC

  25. Joel says:

    AN UPDATE: For those of you who have followed the Bill Shock issue - the FCC is about to vote on new proposed rules to address this problem. Watch our blog for more information.

    Some of you have also asked for the FCC's help through your comments on this blog. The FCC has no way to reach people who comment on our blogs unless you include your contact information in your comment. If you'd like to file a complaint, you can do so by going to our Consumer Help Center at fcc.gov/consumers. And if you have a story that you think raises an issue we should pay special attention to, you can reach me at joel.gurin@fcc.gov.

    Thanks,

    Joel Gurin
    Chief, Consumer and Governmental Affairs Bureau

  26. Valerie says:

    I have quite a few issues with the phone companies. We can be responsible for our own actions but we have to know how the system works. Why should the answer to your question be some type of legal talk that only makes sense to them? They can see the usage happening every month. They send out all other kids of junk mail - why can't they send a message when you get close to your limit? Better yet, make an option available so that I can opt in to get a message when I get close to a certain number? This whole issue is getting bogged down by regulating situations that are common sense. If the companies can't make money off of the service, they will not just offer to help even when asked. Don't get me started on the fees - it's not them. It's the Government who is imposing the fees that they have to pass on to the Customer.

  27. Flashfox says:

    One other area is that of international roaming. In this age of "always connected" super phones, people get gouged by exorbitant data charges when roaming internationally (T-Mobile ~$15/MB global, ~$10/MB in Canada). The problem is that for many phones there is no easy way to turn off data roaming. Sure, you can switch it off but some applications just turns it back on to sync-up. Like noted above, here are many users who left on international trips, only made a couple of calls and came back to a $2000+ bill.

  28. TexasGuest says:

    I experienced 'bill shock' many times from my previous regional carrier, who found various ways to increase my bill every month. I was a customer of theirs for over 12 years, and still I could not get them to work out a better arrangement. I finally had to transition to another, more well known carrier, losing my old number in the process, and am quite happy so far.

  29. Guest says:

    the only thing Shocking in my cell bill is that I am apparently still paying into the Universal Service Fund. This started in 1913.....do we have enough rural roll-out of Telegraph Lines yet?

  30. Ron H says:

    Mr. Gurin, I would like to contact you about a related problem with my phone carrier (Verizon). I am attempting to purchase a new phone. Due to my work environment (I am a Lieutenant in a major metropolitan Fire Dept), I require a tough phone. And the only Tough water-resistant phone on the market (yes, I occasionally get wet, and so does everything in my pocket). Casio’s G'zOne line is a favorite among department members. With my crew relaying more and more on texting for communication, I have found that I need a QWERTY keyboard. The Boulder fits this description perfectly. I don't have a problem paying the $200, or more for a phone that has the features that I need and want. However, Verizon is FORCING me to purchase a data plan with this phone.

    I will take FULL responsibility for what ever services I use and for how long, regardless of how much the bill is. I am a responsible adult and know how to check my minutes and usage ect. That being said, I REFUSE to pay for a service that I do not want, do not need and will not use.

    I do not listen to or download music on my phone. I have an I-pod for the very few times I want to hear music and I'm not near a radio. I do not use the Internet on my phone. I have computers around me all the time and don't feel like squinting to read a web page on a 1 X 2" screen, my eyes just aren't that good any more. I don't need E-mail on my phone. Please! I have enough access to email and don't need or want to be bothered every time someone sends me something. I take time at the beginning and end of my day to go through my mail.

    I want and will use all the rest of the feature of this phone.

    Verizon is simply Lying about all the reasons for doing this. Allow me to document (and I have all of these in writing from them). They first said that they are forcing this mandatory data plan on me to "prevent billing surprises from accidental usage" (Bill Shock). This is a lie because they offer an option of purchasing a push to talk plan instead. I guess they don't care if you get shocked with Data charges if you pay for Push to talk. When I confronted them on that, they changed their tune. They started saying they are doing it to make up for large subsidy on the discount when you buy the phone through them. My answer, O.k., I'll buy the phone from a 3rd party and Verizon won't have to pay for my discount. I asked the rep if I would still have to buy a data plan. Answer...YES. Even if someone GAVE you a phone free and clear, depending on the phone (i.e. MOST of their phones), you would still have to buy the data plan. What has THAT got to with the subsidy?! They only offer TWO phones out of the over 30 that they have with a QWERTY keyboard that don’t require a data plan. And both of them are sub standard phones that have terrible user ratings.

    A lady gave her child her old phone that she had in a drawer. She just wanted her child to be able to contact her in an emergency. Because she was on a tight budget, she called up to activate the phone on the lowest plan. They told her she would be forced to pay for a data plan because of kind of phone it was. She had to pay extra for internet access just so her child could call her in an emergency and to be able to keep her child safe! Is this right?

    Bottom line. The data plan is NOT needed to operate the phone. This is NOT even a smart phone. They just want to charge you for a service that you don't need and will not use. Period. For no reason other then the fact that they can and no one will stop them. If the cost of my text and talk plan would've have went up by $5 – 10, I wouldn't complain. Hey, inflation, prices change. I can deal with that. If the cost of the phone was more, I can deal with that. The phone has the features I want, and I have to accept what it cost or get another phone. But I WILL NOT pay for a service that I WILL NOT use and do not want.

    They will not budge on this issue. I have spent DAYS working on it and have 25-30 of correspondence trying to deal with them and other agencies on this issue. They have offered to cut the price of the phone for me. They have offered to rebate 3 months of the data plan to me. I don't care about they cost of the phone and 3 months less STILL means that I have to pay for a service that I do not want and will not use for the rest of my time at with them.

    Mr. Gurin, Verizon isn't the only one FORCING these data plans on customers that do not want them. How do THEY have the right to tell us what services we HAVE to buy from them. And how do THEY have the right to tell us how to use our phones? If I buy a GM car, they don't FORCE me to activate the On-Star. I CHOOSE to do it. It is an OPTION.

    Why won't the FCC do something about there FORCED and UNREASONIBLE charges. If I want something, I WILL pay for it. No one should be FORCED to pay for something they do not want. Why won’t the FCC protect us from the Extortion we are being subjected to?

    Thank you and be Safe!
    Ron H.

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