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Denying Bill Shock by Distorting the Facts

July 15th, 2010 by Joel Gurin - Chief of the Consumer and Governmental Affairs Bureau

By Joel Gurin and John Horrigan, Consumer and Governmental Affairs Bureau.

The FCC receives thousands of complaints a year about cell-phone bill shock – what happens when consumers get sudden, unexpected increases in their bills from one month to the next. In May, we released a national survey, done with two major research firms, showing that 17 percent of Americans – 30 million people – have experienced this problem. Click here for the whitepaper on the FCC survey.  

Now, rather than focusing on ways to address consumers’ concerns, the wireless trade association (CTIA – The Wireless Association) has been hard at work finding unfounded ways to criticize the FCC’s data.   The association’s latest attack on the FCC’s study is based on an astounding misstatement: that as many as 70 percent of the people we interviewed were teenagers. This is simply untrue -- in fact, we made it clear that we interviewed only adults.

Ironically enough, this whopper of an error stemmed from CTIA’s misunderstanding of how research organizations interview cell-phone users, who are an increasingly important part of any survey sample. Click here for a more detailed rebuttal of this and other errors in CTIA’s argument.

It’s unfortunate that CTIA, which represents one of the country’s most innovative and productive industries, has decided that ignoring or distorting the facts is a better strategy than simply addressing wireless customers’ concerns. This trade association apparently believes there’s nothing to worry about if 30 million Americans have gotten sudden increases on their cell-phone bills.

At the FCC, where we handle thousands of complaints a year on exactly this subject, we do believe that it’s a problem, and one that consumers shouldn’t have to experience. Moving forward, we hope that CTIA can work with us on simple solutions to help their customers avoid these costly surprises.

Cross-posted to The Official FCC Blog.

21 Responses to “Denying Bill Shock by Distorting the Facts”

  1. Fleeing Verizon Customer says:

    FCC,

    Please continue your efforts to address these issues. Speaking from personal experience, both as an IT professional as well as a Bill Shock victim, the practice of creating exorbitant billing situations is purely profit driven. After having a Bill shock moment arising from one month of excessive text messages (after believing, incorrectly as I was told, that I had an unlimited text plan) I asked why I wasn't informed that I had reached the limit of my text messages. The representative told me "it was not a practice that they engaged in", even though it was "often requested". As the conversation continued (while I worked to change my plan to prevent this in the future) the representative and I found we had some common interests and viewpoints and started to relate to one another more socially. When I broached the subject of consumer notification again the rep stated, in a less official fashion, they(reps) weren't sure why they(Verizon) didn't do it either! They stated it wasn't like they COULDN'T do it technically (they could), but they are told explicitly to NOT notify consumers of plan excesses, even when they can see customers bills going through the roof and 90% of the customers just end up calling later and complaining.

    The rep was very nice and recommended during our conversation that based on my historical usage I was 2 tiers up from where would make the most sense for me (I was historically using about 157 min a month on a 900min/mon plan) and asked if I would like to change that while I was at it. I hedged some but eventually agreed. This turned out to be a mistake. My voice minutes spiked the next month and I ended up in another bill shock situation. When I called back to complain and ask AGAIN why I wasn't informed this time of my excessive voice usage (via txt or something else) I again started to hear the same boilerplate legal script about "it was not a practice that they engaged in"... That's when I decided to switch carriers.

    I faced back to back bills which were 300% of my normal costs. As an IT professional I know that automated systems can inform users of warnings or excesses and I refuse to accept that there is any reason, other that profit driven, why companies allow this practice to continue. That being said this opinion was even more cemented when I realized why they were able to get away with it ... When I told the rep during my second bill shock moment I wanted to cancel my account they had a ready reply given in a practiced and ice toned fashion, "No problem let me just inform you of our early termination fees on your two year contract..."

    Luckily I only had to wait 5 months... relatively short given they do everything they can to get you to renew those each year.

    Please FCC... Keep on this issue, as a consumer I am doing my best to vote with my wallet... but there's only so much I can do. Thank you for all your efforts!

    Very Respectfully,
    Looking for a new provider

  2. Observer says:

    I too find the FCC response to be deeply troubling. The issue is with the interpretation and presentation of the data which is a subjective evaluation of statistically derived data. This is wholly inappropriate.

  3. Guest says:

    Would this be the appropriate point to address 'USF Bill Shock' as it jumps around (mostly up) over the last few months? Probably not. Can we commission a study how pleased people are when getting quoted a price only to find a massively larger bill due to USF, Taxes, Federal Excise surcharges, Federal regulatory recovery fees and half a dozen other charges? The entire telecom, wireless, and tax/surcharge industry is built around maximizing returns. Only the consumer is looking for it to go the other way.

  4. Disapointed and Concerned says:

    I agree with ipublis. The response is totally inappropriate for a governmental agency. It is better suited to a private entity trying to spin an issue as opposed an a legitmate, measured response from the FCC. Sadly, I doubt either the writer or any supervisor overseeing this blog will see it this way. Goebbels would be proud of this type of government response.
    .
    To those complaining about the charges. YOU signed the contract and should understand the rights and responsibilities of any agreement. Take responsibility for your actions and the actions of your children. Please don't blame the providers or look to the FCC to clean up something that you didn't pay attention to.

  5. KnowledgeIsPower says:

    Bravo, well said JT82. I am tired of people complaining about overage charges for minutes or data usage. How about some accountability on the part of consumers? Grow up and act like adults. If your not sure what your plan covers, then just call in and ask. Stop blaming wireless cellular service providers for being too lazy to check your minuttes and data usage. Its some big conspiracy, they are not hiding what your usage is. Every provider has tools to check minutes, data usage. What more do you want them to do? All carriers have websites you can log in to manage your account. Seriously people, the times I have incurred overages, I have paid them, yeah it sucked, but I was a man about it and took responsibility for it and took care of it. If your not smart enough to use the tools given, then maybe a cell phone is not for you. Carelessness can have a very high price tag

  6. Guest says:

    I believe that many of the carriers that provide cell service would be happy to support the FCC's proposed plan for monitoring every customer's data, text, and calling usage. However what I'm not sure about is whether or not the people who are in support of this change are aware what the overall effects will be in terms of their charges. While it will decrease the possibility of overage (or at least unobserved overage) it will likely increase the overall bill while the companies try to cover the cost incurred with inventing a system that can monitor (potentially) 100 million cellphones at any given time. I'm sure if the FCC had some proposal to come up with the money or developed the system with the carriers for tracking the usage it would go a lot smoother and end much better for everyone. I support a universal monitoring system for the fact that it will indeed help the consumer. I'm just not so sure about what the execution will impact overall.

  7. Duped By T-Mobile says:

    I have been going to Nigeria for several years now with my T-Mobile Blackberry that I bought for international use to retreive my emails while I am abroad. Each time we travel we are careful to call T-Mobile and let them know we are travelling and they in turn place a onetime email roaming feature on my phone for $19.99 during the period of time I travel. This has always worked fine, as long as I don't open the browser on my phone as advised by T-Mobile. If I want to make phone calls the fee quoted and what I have always been charged is $1.99 per minute. I have many bills reflecting these charges from past trips. Suddenly, on one of my last trips I got home and my bill for the one month was $1,589.64 and I had turned on the roaming feature before I left home and confirmed all of my potential charges. I called T-Mobile and was told that it had nothing to do with the email, and was asked if I left my phone on while in Nigeria. Of course so that I could access my email. I was told that even though I did not answer any incoming calls that I was being billed $3.50 per minute, so I should have just answered the calls. This has never ever happened before, I was only billed for the calls I made or answered. Nor was I ever informed about the per minute increase to $3.50. The representative said that it is listed somewhere on the website that T-Mobile has the right to increase your charges anytime and without notifying you. Consequently, I was forced to pay the entire bill even though I did not receive the calls. They have a sister company (HOV) that they referred me to that gave us monthly installments of $138.00 for twelve months to pay off the one month bill, in addition to paying our new monthly charges which average about $200.00 a month. This is a hardship, especially when you are forced to consent to automatic withdrawel of the $138.00 per month charge or else lose your service. HOV was created by T-Mobile so that they do not have to dicount or give back any warranted credits, rather they finance the one bill shock and think that the customer should be content for allowing them to help you. I am taking my case to court and I erge everyone to do the same. Tell everyone you know as well to do the same. These companies are intentionally making money by placing people in financial hardships, the constant rip off by corporate America is why our economy is where it is and America is losing its lead in the world. Stop ripping us off.

  8. Guest says:

    This blog is obviously littered with propaganda placed by folks representing the cell phone industry. Those of you blaming the consumer are forgetting about the tricks the cell companies use to garner these extra charges, like adding internet applications to phones that cannot be disabled and whose shortcuts on their branded devices are placed in places that are all to easy to accidentally access. You cannot tell me this is not social engineering. I pay for a certain set of services and am told that I cannot block the other services I DO NOT WANT and that the messaging services I do want will not work without the other. Pure unadulterated and high level scamming!

  9. Smart Phone says:

    I received a "bill shock" after switching to a smart phone data plan. Due to required internet use my bill increased significantly. The price you pay for technology nowadays.
    http://us.blackberry.com/smartphones/

  10. 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

  11. Guest says:

    Well, I just had some "sticker shock" on my bil of web usage to the tune of over $5,000 on one usage. We don't use the web on our cell phones ever. Verizon says they've investigated and it was from one of our phones. Not true. Why would someone do that when they can call and immediately have unlimited usage for much less? So, either their data is wrong, it was an "accidental butt call" or someone was a very very good pickpocket who returned the phone.
    We are calling Verizon again now. The bill is due this weekend and we aren't paying it. Unfortunately, if it's cancelled it opens a new can of worms, as that is the only contact phone number for an unemployed child who has put the phone number on her resume'.

  12. Leslie Grisham-Ousdahl says:

    Can someone please provide any information about the "surcharges" on these wireless communication bills? On my Sprint bill, and I've learned this statement is on all wireless bills, with each company charging back to the consumer, whatever part of these fees they believe they can collect from you and me is the following statement:


    Sprint Surcharges
    Sprint Surcharges are rates we choose to collect from you to help defray costs imposed on us. Surcharges are not taxes on you or amounts we are required to collect from you by law. Surcharges may include: Federal USF, regulatory charges, administrative charges, gross receipts charges, and other charges incurred to recover costs associated with governmental programs, and certain taxes imposed on Sprint. The amounts, and the components used to calculate Surcharge amounts are subject to change.

    _________________________________________________________________________

    Ok, so these charges are NOT taxes --- they are NOT required by law to collect these charges ----- but they are charges THEY CHOSE to collect?

    Do they NOT COLLECT enough in other fees? What is going on here? Are these companies ALLOWED to collect these amounts from consumers? Can someone please give me direction because I've searched the FCC website and can not seem to find anything or much of anything about whether this is allowed --- or whether they have the authority just to collect whatever it is they want, whenever they CHOSE to do so.

    Thanks for anyone who is listening or who responds to my concern.

  13. Guest says:

    Responding to JT82 - I received a $700 "bill shock" due to the use of a teenaged daughter.

    Some of us really are blind-sided. When I set up her account as "unlimited texting and calling" - that's what I thought I was getting. Silly me. Who knew about the $9.55 ring tones and quizzes and games billable to me, just because my teen daughter provided a cell phone number online?

    We are not all idiots. The telecommuncations providers know exactly what is going on. They need to be reined in.

  14. Guest says:

    So the FCC believes a consumer should never see what they (consumer or FCC) deem as bill shock (At the FCC, where we handle thousands of complaints a year on exactly this subject, we do believe that it’s a problem, and one that consumers shouldn’t have to experience.). The rates and charges are available to the consumer, so the consumer can use the service in a manner that fits their needs. When the consumer chooses to act in a manner that increases the cost of their monthly service it is and should be billed to the consumer in accordance with the plan they agreed to. Service does not come free. Accept the responsibility of your choices and actions. If a cell phone is too expensive, get rid of it.

  15. Guest says:

    The companies should not be able to charge you more than what you would have paid for the next higher plan or option including up to the charges for 'unlimited'. How on Earth can they justify charging someone $100's or $1,000's for per-use or overage for something the consumer could have had for a flat rate? This is true of texting, data & voice and is truly unfair & should be considered gouging.

  16. Guest says:

    This is a consumer issue. In my experience early termination fees are well known. When I sign a contract (a binding agreement), it has always been well stated. As to a sudden high bill, again, the plan and rates had been well defined. And the additional charges for going over the plan have been well defined.

    If a user goes over what he/she has contracted, then it should not be the responsibility of the phone carrier.

  17. JD Lien says:

    This is a massive issue, and there should be guidelines for carriers to follow about being up front with people about costs, and providing simple and effective means of gaging use. I can't believe that we're in 2010 and still suffering from these problems when we should all be able to get inexpensive and pervasive mobile Internet. Using a mobile web browser like Opera Mini (http://www.opera.com/mobile/ ) can help to mitigate this problem a little bit because it compresses webpages to save on bandwidth costs, but it seems that the telecoms themselves will never do anything to address this problem because that would only dampen their profits... the FCC is a body that can and should do something about this.

  18. ipublius says:

    I will not focus on the merits of the issue raised in this blog, rather I am writing to express my concern about the lack of professionalism it reflects. I worked at the FCC many years ago, and am shocked at the snide tone of your blog. I think it is completely unprofessional for representatives of a government agency to respond to criticism in such a manner. During the years I worked at the agency, that kind of intemperate response would not have been tolerated, and for good reason. It is clear from the tone of your blog that you have personalized the criticism of your study. A true government professional would take such criticism in stride, and respond objectively, methodically, and with a tone that befits the office and public trust he or she holds.

    Beyond that, it is evident that you have pre-judged the outcome of this proceeding notwithstanding the fact that the comment cycle has not yet closed. That too is quite troubling. I look back with pride on my years of service at the FCC, and it saddens me to see the agency stoop to this level of unprofessionalism and lack of objectivity.

  19. Guest C says:

    My problem with Verizon is that one signs up and some charges are added on because it came with the plan. However, there was no statement of the add-ons having a specific charge. Am now battling with them in the area of the charges. Some of the services are free but the latter ones are not. My point is that implied charges are not legal (in most states) and that I should have the YES or No on chargeable services.

  20. JT82 says:

    All I have to say is you are given tools by the carrier to monitor your usage. Websites and short codes you can dial (and the carrier makes it VERY clear on how to use them) are available. Its reprehensible to think that people are disguising ignorance as "bill shock". This new "buzz word" is giving merit to idiots. I've had a cell phone on various carriers for 10 years. Never ONCE did I have a "bill shock" incident because I was aware of how I used my phone and changed plans when my usage went up. Take some responsibility for yourself. What's worse is the government is holding the idiots hand - disgusting.

  21. Guest says:

    It's pretty naive to think that big companies these days aren't using deception at every turn to make more and more profits. "Acting like a grownup" won't keep you from getting scammed and lied to. And yes, maybe we all ought to chuck our phones in the garbage and stop being used and degraded any further by the media giants

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