FCC Cracks Down on Cell Phone Bill Shock

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The Federal Communications Commission announced Thursday that it will propose a new set of rules to help consumers avoid cell phone bill shock.

The new rules would require that phone companies notify customers when they have gone beyond their monthly minutes or when they are about to suffer roaming and international charges.

According to an FCC survey from earlier this year, one of six consumers has experienced a cell phone bill that was drastically higher than they’d expected. The FCC also found that  the main sources of bill shock were “unanticipated roaming or data charges.”

While these new rules are a step in the right direction, some have argued the plan doesn’t go far enough.

“The FCC rule shouldn't just compel cell phone companies to give consumers conspicuous warnings before they rack up big overages. They should make such overages impossible,” Timothy Noah wrote in Slate recently. “Consumers should receive a text or voice message alerting them that if they want to keep running up overages they must affirmatively tell the mobile carrier that they want to by dialing in some word or number.”

In a sense, Noah’s argument sounds similar to the way overdraft fees on bank accounts have been reformed. In the past, if a consumer made a mistake and overdrew their account, all the bank had to do was notify them after the fact and charge them a fee to get the money they needed. But now, consumers must choose to opt-in to this sort of coverage, and if they choose not to, they will simply not be able to take out money after their account has been overdrawn.

In the same way, one might argue, as Noah does, that consumers should have the option to decide whether their phone company can give them roaming access or extra minutes, recognizing that it could cost them extra in the long run.

At the same time, as the FCC noted back in May, one of the other big factors that results in bill shock is “unclear or misunderstood advertising,” a problem which these proposals largely ignores. As we’ve reported before, consumers often get slammed by random hidden fees, including roadside assistance and early termination charges. Perhaps there should be new regulation to force the phone companies to disclose these charges in a more upfront manner?

Still, the proposed rules would be enough to strengthen the consumer’s ability to take legal action against phone companies in the future if they add on charges without proper notification.

The new rules will be reviewed by the public over the next 60 days before being put into practice.

Check out MainStreet’s roundup of tips to keep your cell phone bill from spiraling out of control.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

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