Usage alerts, other steps proposed to prevent unexpected phone charges 

After much public hand-wringing, the FCC has released a Notice of Proposed Rulemaking (NPRM) proposing new rules that would require mobile service operators to provide usage alerts and information to assist consumers in avoiding unexpected charges on their bills. 

Data indicate that many mobile consumers experience “bill shock,” a medical condition in which a sudden, unexpected increase in one’s monthly cellular bill causes massive trauma to a consumer’s wallet. Typically the increase results from unintentional usages outside the scope of the consumer’s service plan. According to the results of an FCC-conducted survey, as many as 30 million Americans have experienced bill shock, a condition which medical professionals believe could be prevented by timely and easily accessible usage information. Unfortunately, this condition does not fall within the new Health Care Law, so millions of consumers have been left unprotected.

The GAO released a report to Congress which estimated that 34 percent of wireless phone users received unexpected charges on their bills. Many of these consumers were not alerted by their provider before they incurred the charges even though the technology to prevent bill shock exists. That technology is not uniformly utilized by mobile service providers. 

As the Commission sees it, consumers are entitled to baseline information allowing them to control the costs they incur for mobile services. Accordingly, the FCC proposes requirements that will provide timely information to consumers about their usage, such as:

  • voice or text alerts when a customer approaches and reaches monthly limits triggering overage charges;
  • notification that international or other roaming charges not covered by their monthly plans are about to be incurred; and
  • disclosure of any tools offered by mobile providers to set usage limits or review usage balances (on this point, the Commission also suggests that it might be inclined to require all carriers to offer consumers the means of setting their own usage limits).

On the assumption that such limits will be imposed, the Commission is interested in suggestions about how the rules should be implemented. For example, should such notifications be provided in “real time”, and if so, what technical limitations might come into play? How should notifications be provided for multi-line family plans? What is the most effective way to provide the notification (e.g., via voice or text alerts)? 

Also, should the FCC establish a precise usage level at which the initial notification message would be triggered? For example, new EU regulations require that wireless providers notify a consumer using a data roaming service when the consumer has reached 80% of an agreed-upon limit. 

Also, should multiple alerts be provided (either at reaching the trigger amount, upon exceeding the monthly usage amount, or every time the charge is to be incurred) or would a one-time alert be enough to do the trick? In any scenario, should the exact amount of the soon-to-be-incurred charge be provided? How long should mobile providers be given to implement any usage alert requirements that might be adopted. What are the best methods to ensure that consumers are made aware of the available tools for monitoring usage balances and limiting usage? How can consumers access these tools and any applicable charges? Also, should all mobile service providers be required to comply with the proposed requirements? Should prepaid services be exempted from the alerting requirements?

The NPRM was published in the Federal Register on November 26. That establishes the deadlines for comments on the various proposals: Comments are due by December 27, 2010, and reply comments are due by January 25, 2011.