FCC, CTIA Announce 'Bill Shock' Protection

The FCC and CTIA released guidelines to help educate and notify consumers about impending wireless data and roaming charges.

The Federal Communications Commission, the wireless communications association CTIA and Consumers Union announced a set of industry changes meant to reduce "bill shock," or the unexpected charges many consumers incur by passing the limits on their data plans or making expensive roaming calls while overseas.

The regulations require network operators to send voice or text alerts to the user as they approach and reach the data limits that would result in charges, send alerts when they are about to incur international roaming charges, and disclose tools available to let consumers monitor their own data usage and roaming costs.

The alerts will be free and automatic, without the need for a consumer opt-in, and the program is expected to be up and running within 12 months. "The goal was to change practices to benefit the consumer," said FCC chairman Julius Genachowski. "Consistent with the FCC's ongoing efforts, these actions harness technology to empower consumers, and ensure consumers get a fair shake, not bill shock."

The CTIA "Wireless Consumer Usage Notification Guidelines" will become part of the broader CTIA "Consumer Code for Wireless Service" that provides disclosures and practices for wireless service to individual consumers. By Oct. 17, 2012, participating carriers will provide customers with at least two out of the four notifications for data, voice, text and international roaming and all of the alerts by April 17, 2013.

More than 60 percent of wireless customers with traditional cellular plans would support a government rule to avoid cell phone "bill shock," according to a 2011 poll released by Consumers Union. Such a rule would require mobile network providers to notify customers when they are about to exceed their plans' allowance so they can avoid overage charges. The poll also found wide support-57 percent-for a government rule requiring that wireless providers give their customers the option to have features disabled when they are in danger of exceeding their plans' allowance. The survey also found that one in five respondents had received an unexpected charge on a cell phone bill during the past year, with 38 percent reporting being hit with a charge of $30 or more.

"Consumers have been telling us about -bill shock' for a long time, and we've been pushing for reforms to crack down on the problem. We're encouraged that the industry is offering to provide free alerts to help customers avoid -bill shock,' and we urge them to do it as quickly as possible. Some companies are already providing free alerts, while others are charging extra fees for them, and we think it's possible to-and consumers deserve to-immediately receive free alerts to avoid overage charges," said Parul Desai, policy counsel for Consumers Union. "We're going to work closely with the FCC to make sure companies comply, and we're pleased the Commission is keeping this proceeding open to help ensure compliance. Ultimately, this is about helping people protect their pocketbooks, so we applaud the FCC and the industry for this effort to do right by consumers."