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Published: August 2010

Protect consumers from cell phone “bill shock”

Coalition: Telecommunications

Consumer Action and National Consumers League submitted comments to the Federal Communications Commission on the issue of "bill shock," or the phenomenon of consumers receiving huge bills from their cell carriers after they use their monthly plan minutes.

Below is an excerpt from the comments:

“Bill shock” is an issue that affects tens of millions of American wireless service consumers. While stories of multi-thousand dollar bills have generated headlines, we fear that many more consumers are silently acquiescing to less-expensive “bill shocks.” Current mechanisms for addressing “bill shock” are dependent on consumers proactively deciding to use carrier-provided monitoring and notification services, often in exchange for a monthly fee. Exacerbating this problem, industry-wide early termination fees (ETFs) often lock consumer into multi-year contracts. This creates a disincentive for consumers to cancel service in reaction to “bill shock,” and a disincentive as well for carriers to institute a proactive solution such as the one under discussion in the Notice [...] News reports in recent years have frequently noted extreme instances of “bill shock.” A short-listing of such cases would include:

• Wayne Burdick, an AT&T customer, received a $28,067.31 bill after he watched a Chicago Bears football game on his computer. At the time, Burdick was on board a cruise ship docked at a U.S. port. Burdick’s AT&T mobile broadband card had connected to the ship’s microcell rather than the local preferred tower. Because of this, Burdick’s data use was billed at extremely expensive roaming rates. Had his card connected to AT&T’s local tower, he would have been billed at normal rates. This problem was only resolved after Burdick contacted the Chicago Sun-Times, which in turn contacted AT&T on his behalf.
• Barbara Furie, a T-Mobile customer, received a bill for $2,600 in international calls and data downloads after her mobile phone was stolen in Belize,. The thief ran up approximately $2,600 in charges before Furie recognized the theft and contacted T-Mobile. The company informed her that she was responsible for all the charges. Furie was able to pay half the charges and T-Mobile turned over the remainder of the bill to a collections agency. After a New York Times reporter called T-Mobile on Furie’s behalf, the company agreed to forgive the excessive charges imposed on Furie.
• Bob St. Germain, a Verizon Wireless costumer, received an $18,000 bill after his son tethered his computer to his mobile phone in the belief that he was subscribed to an unlimited data plan5. When St. Germain renewed his contract, Verizon Wireless removed the promotional free data plan from the account. Subsequent data usage was billed at regular per-kilobyte rates, resulting in the large bill. St. Germain’s and state utility officials’ efforts to negotiate a reduction in the bill were unsuccessful and the charges were referred by Verizon Wireless to a collection agency. It was only after the Boston Globe published a story on the issue that Verizon Wireless relented and forgave the charges, more than four years after the original bill was received.

Consumers should not have to rely on the news media to get relief from extreme cases of excessive charges. While these examples of “bill shock” make headlines, such cases are illustrative of the much larger number of consumers who experience “bill shock.” The Commission’s own data reports that one out of every six consumers (or 30 million subscribers) has experienced bill shock. Among these consumers, more than one third experienced bill increases of at least $50 and 23 percent said that the increase was $100 or more. Regardless of whether bill shock comes as a result of a technical glitch, misunderstanding or a misuse of a plan, it is clear that consumers do not typically intend to run up their bills.

As the FCC’s survey data notes, “bill shock” is a significant problem for tens of millions of American consumers. As they increasingly look to wireless carriers to provide an always-on, ubiquitous connection for the provision of voice, text and data services, consumers may face more frequent cases of “bill shock.” Without FCC action, consumers will be left unprotected from the “bill shock” phenomenon.

We believe the status quo is unacceptable. Current mechanisms to prevent “bill shock” are limited by substantial fees, self-enrollment and active monitoring requirements, inconsistency across carriers, and lack of roaming control.

Lead Organization

Consumer Action and National Consumers League

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