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FCC aims to stop cellphone ‘bill shock’

European rules could serve as model for US regulations

By Megan Woolhouse
Globe Staff / May 12, 2010

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The Federal Communications Commission says it wants to prevent the “bill shock’’ that results from receiving an outrageously high wireless cellphone bill — sometimes totaling thousands of dollars — saying the problem may be widespread.

The commission has been studying regulations adopted recently by the European Union that require phone companies to notify customers when cellphone, text, or data download charges grow suddenly and excessively over a short period of time.

It is considering adopting similar rules in the United States.

As part of the process, the FCC is accepting comments from consumer groups and industry specialists.

Joel Gurin, chief of the commission’s Consumer and Governmental Affairs Bureau, said officials decided to take the step after receiving hundreds of complaints from customers and reading a recent Boston Globe story about a Dover man who received an $18,000 cellphone bill covering a six-week period.

The story “confirmed this was an issue where a lot of consumers can suffer pretty significant losses and where carriers have not yet found a solution,’’ Gurin said.

Consumer groups have called for a notification system, similar to the kind used by banks and credit card companies, to alert customers about spending limits or questionable transactions on their accounts. Under such a system, phone companies would have to immediately call attention to excessive cellphone usage, instead of simply requesting payment at the end of a billing period.

The FCC is seeking input from a variety of sources, including individuals, researchers, academics, and industry insiders.

The agency wants to know if the industry has the technology to create a system for monitoring high-volume wireless, text, and data usage, instead of sending customers massive bills for unintentional usage.

CTIA, a nonprofit coalition of wireless carriers, said in a statement yesterday that wireless companies already offer enough tools to help customers manage their accounts.

“Each of the four large carriers, as well as many smaller carriers, provide consumers the ability to monitor how many minutes, how much data, and how many texts they have used for free simply by typing key phrases in their phone such as *MIN, *BAL, #MIN, #DATA, *2, and more,’’ the group said.

“Consumers can also call their carriers or check their usage via their carriers’ websites.’’

Bob St. Germain of Dover said an alert from Verizon, like the one proposed by the FCC, could have prevented him from being billed for $18,000 in 2006.

St. Germain said his son, then 22, used a cellphone to connect to the Internet without realizing the terms of his family’s wireless contract had changed and data downloads were no longer free.

St. Germain still has not resolved the charges with the phone company.

“I’d love to see some changes made,’’ he said yesterday. “Why don’t they just eliminate the problem?’’

Officials at Verizon Communications Inc. did not respond yesterday to calls seeking comment.

Previously, the company has said that it offered to reduce St. Germain’s bill by half, a settlement he refused to accept.

Groups such as Consumers Union, the nonprofit publisher of Consumer Reports, called the FCC’s action a “helpful first step’’ toward resolving wireless billing issues, adding that it hoped the move would encourage additional regulation, including curbs on early termination fees.

Any proposed changes in wireless billing regulations would need a majority vote of the five-member FCC to be adopted.

Megan Woolhouse can be reached at mwoolhouse@globe.com.

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The Federal Communications Commission has raised questions about the reasons for "bill shock."Among them:
Can consumers easily monitor their use of voice, text, and data services?
Do cellphones indicate when roaming charges are being incurred?
Are consumers aware there are significant extra charges for making international calls?
Anyone who wishes to comment to the agency about billing issues can do so at www.fcc.gov.