FCC to Tackle Bill Shock, Consider Overage Warnings

The FCC, following queries into the practices of wireless carriers, is set to propose new rules requiring that customers be alerted before charges are incurred in addition to their monthly plans.

The Federal Communications Commission is taking its next set of steps to prevent U.S. consumers from experiencing "bill shock"-unexpected charges on their mobile phone statements due to hidden costs or unclear billing practices.

According to the New York Times, FCC Chairman Julius Genachowski on Oct. 14 will propose to the five-member commission that wireless carriers and mobile Internet companies be required to alert consumers when they're about to incur charges above the set amount of their monthly plans.

"The data is clear that there is a significant consumer issue," Genachowski said.

A study commissioned by the FCC regarding consumers' feelings about their wireless service bills found Americans to be generally confused about wireless billing. Approximately 30 million Americans reported experiencing sudden one-time increases to their bills, though they hadn't made changes to their calling or texting plans.

In May, Joel Gurin, chief of the FCC's Consumer and Governmental Affairs Bureau, said the FCC has fielded hundreds of complaints about bill shock and his team was questioning carriers about the practice and costs of alerting consumers to overages. Requiring such a warning would not be unprecedented, as carriers in the European Union are required to warn customers when they're close to their data limit or about incur roaming charges.

"The solution is a 21st-century solution," Genachowski said, according to the Times.

Still, mobile phone companies are less keen to take up the practice, even while asserting that customers have the right to clear information regarding the wireless usage. In a filing with the FCC, Verizon pointed out that many wireless carriers helpfully offer online tools that allow customers to monitor their usage.

Such online tools, however, have not been enough to prevent bill shock. The FCC got involved in the issue, the Time reports, after The Boston Globe ran a story about a Massachusetts man who racked up an $18,000 bill after an offer of free data downloads expired.

The FCC, in its proposal Oct. 14, will ask that wireless companies make their billing practices easier to understand and more clearly spell out what the limits of a contract are and what fees apply. "Most people still don't know what a megabyte is," Genachowski said, according to the Times. "So it's hard to expect them to know when they have reached their limits."

According to the Times, the chairman's office rarely puts forth proposals that aren't likely to receive the support of the majority of the board.