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FCC to address 'bill shock' from data and hidden cell phone charges

WASHINGTON — The Federal Communications Commission wants cell phone customers to know: It can hear you now.

Consumers are complaining in record numbers about their wireless bills, and the FCC has promised to act. Next week, the agency will unveil a proposal to address "bill shock" by requiring carriers to notify users of overcharges and sudden increases in their bills.

But advocacy groups say the FCC has barely begun to address the massive problems generated by increasingly bewildering phone bills.

As cell phones are "bundled" with television and Internet services, and with the exploding number of applications available for smart phones, consumer groups say bills have become multipage puzzles. They complain of confusing language, third-party charges, mystery fees for data and other services — all amounting to monthly totals that aren't what a user signed up for at point of sale.

The recent announcement that Verizon Wireless wrongly charged 15 million customers for data fees and will shell out $50 million in reimbursements doesn't help public sentiment.

"This is only one case that made the light of day," said Carl Hamann of Stamford, Mich., who believes he was one of those Verizon customers.

He said he was charged $1.99 for data he never signed up for in January and February. He's been charged for data each month over the past year, even though he's signed up only to place and receive voice calls. Hamann said he put a block on his account so he and his 20-year-old son can't use text and data services. Still, he got billed $73.65 for data in June and $68.25 in July.

Small "mystery" charges are among the most common errors on cell phone bills, according to Validas, a Texas-based company that audits telecom bills for corporations and individuals.

Edward Finegold, Validas' chief analytics officer, said one growing problem involves third parties, such as a text-messaging service or ring tone provider, piggybacking onto someone's phone bill. For example, a user may send a text message to an outside service through an offer in, say, a video game, expecting a one-time charge. But Finegold said the fine print allows the service to automatically trigger a monthly subscription fee.

"None of this is illegal, but most people would expect that if you have a trusted relationship with your carrier, it would have strict standards on third parties who add charges to its bills," Finegold said.

The FCC already has rules requiring truth-in-billing practices and prohibiting the practice known as cramming, when companies stuff mystery charges into bills.

But the agency has struggled to keep up with changes in technology and growing complaints.

In the first quarter of 2010, the FCC received 5,130 inquiries on wireless billing and other issues, an increase of 28 percent from the same period a year earlier. In a survey this year, the FCC found that 30 percent of users said they experienced "bill shock," with sudden increases from data overcharges and other services that they found only when they received their bills.

FCC to address 'bill shock' from data and hidden cell phone charges 10/08/10 [Last modified: Friday, October 8, 2010 10:30pm]
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