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FCC Will Tackle Cell Phone 'Bill Shock'
MexiCali59 writes "The FCC is expected to launch a proceeding at its Thursday meeting that could force wireless providers to change their billing practices. The agency wants to prevent consumers from unknowingly racking up oversized bills on their phones when they go over their minutes, a situation the agency calls 'bill shock.' The agency released a survey earlier this year that showed one in six American consumers had been surprised by a cell phone bill. The FCC's proposed rules would require carriers to send text or voice alerts before and when minutes are used up. Notifications would also have to accompany out-of-country charges, and carriers would be required to clearly disclose any tools they offer to simplify billing."
I was forced to switch from one of Sprint's discontinued "Family Plans" to an everything plan in order to get a modern phone a few years ago, and now that I've got an even nicer phone that sucks down more data, I wouldn't be surprised if they discontinue this plan too. Maybe the FCC can keep things semi reasonable, instead of letting things get even worse.
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Because the nature of the business (high barriers to entry, mainly) ensures we have a limited selection of carriers. Limited selection means less competition means less competitive practices, like charging for random "services" like text messages even if the "services" should come for free as part of the protocol.
The problem isn't that people sometimes go over, it is that they are charged a ridiculous amount more when they do. I have a USB 3G Modem with a 5 Gig limit which I watched quite carefully. When I knowingly went over just a few hundred megabytes my bill went from $50.00 to $750.00. Now luckily, I was able to convince an upper level rep that I could have rooted my phone and tethered it, but I chose to get the 3G stick to be fair and make sure they received a reasonable amount of compensation for services provided. Until I laid this on them they absolutely were not going to budge at all. I am very much the exception, as obviously the average customer doesn't even understand what I just wrote, so they would have been just straight screwed.
This is of course ridiculous. Now I admit that I could have perused my contract more fully, but my provider has always been quite reasonable so - having a 7 year relationship with them - I trusted that my contract would also be reasonable. Also, bear in mind that most people don't grok the difference between 5 gigabytes and 300 Megabytes, so the whole "people should pay attention to the contract" argument is flatly absurd.
The bottom line? There should definately be a law against charging multiple orders of magnitude more for overages. There is absolutely no reason why they cannot pro-rate the overage at a reasonable increase (say 50%) and they absolutely count on peoples ignorance to jerk them around.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
Yeah, a website definitely does not qualify as easy, particularly with my non-web-enabled phone. The #MIN thing is closer, though. I suppose I could remember that, or program it on one of my speed dials, then try to remember to check once a day or something. It sure would be nicer if I didn't have to be proactive on yet one more thing in life, though.
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We don't want the government to decide what they can and can't charge. We just want the government to require going over to be something you have to consciously opt in to do.
My carrier won't do it. I asked them if I could block data if I have no data plan, seeing as how they made the default internet button right in the center of my phone (and it sticks out the most). They said no. I suspect most other peoples' carriers won't, either.
The first comment is, to me, the most interesting response:
Sounds like we're once again legislating to save irresponsible people from their own self-destructive actions.
This response is a dramatic oversimplification of what's going on (sadly, a common occurance). What I believe the FCC is proposing is ensuring that _reasonable_ and _prudent_ laypeople can clearly understand the cost consequences of their actions. And, allowing a customer to set a reasonable price cap on their cell phone spending _increases_ accountability--for costs that match their spending ability.
For example, the cost of your garden variety LOL or ROFL missive sent via text message while roaming in Cancun (phone from Sprint [USA]) was about $1. For some, this can become frighteningly expensive. Given that European pay-as-you-go service carefully tracks (and easily reports to the user via a simple text message) their remaining credits, I fail to see why this reasonable ability isn't available to everyone.
And, as someone who has done disaster relief, I have been surprised by a few increases of $40-50 for roaming charges. I am willing to pay this--but I also desire the ability to know up front. I don't think the end user should have to carry their carrier's Terms and Conditions and rate sheet in their back pocket.
Also, some of these cell phone contracts are ludicrous: even the better ones (I like AT&T) don't do a great job clearly delineating between different types of service (for example, my unlimited SMS messaging plan doesn't include picture messaging). If I, as a person who reads contracts as a part of their job, can accidentally miss this, this circumstance doesn't bode well for an average person who doesn't do this.
Accountability requires reasonable rules and transparency--US cell contracts and bills need some help on this front.
I was looking for this post because I wanted to make it. :)
I was thinking that a mandatory user-definable bill-cap would a good way to go with this. The default would be set at, oh, 50% more than your no-extra-charges bill. You would have the option of raising your cap permanently or temporarily.
Your phone would just say "You have reached your pre-set spending limit. You must raise this limit before any further additional fee services will be available from this phone."
How hard is that?
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I'd rather see the government mandate a fee against people that make stupid, nonequivalent analogies.
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So You the customer signed a contract with the cell phone company. You agree to a certain amount of minutes at a certain rate plus additional fees should you go over those minutes. You use your phone. You go over the minutes. But when the cell phone company sends you a bill it's stealing? Don't you have the ability to track the amount of minutes as the month goes by? Even if you don't that's not exactly the cell phone companies fault as you signed up to do business with them.
The customer is also probably the citizen of a democracy of some sort. In such a system, the people can participate in making laws when they feel that some actor -- corporate or natural -- is harming them. The cell phone company knew this when deciding to do business in the country. If enough citizens can demand redress for this grievance through their government, it is their right to. Can the phone company complain about this? Well, sure, but as you pointed out, they voluntarily decided to do business in the country.
I am not a crackpot.
I'd also like the government to adopt (for everyone) a law that states that the advertised price is the price. Not tack on a million different taxes and surcharges (most of many are optional for the phone companies to charge) to it where it goes from the advertised $79.99 a month to 105.49 or whatever. Don't tell me the companies can't achieve it - all the gas pumps here can and it's pretty much standard in Europe.
Now, I don't care if the companies itemize the taxes to explain why the price is where it's at. But this crap happens too often (occupancy tax in hotels) that it's all a scam on an unsuspecting consumer and an educated one can't tell exactly what he'll pay, they just pad the advertised amount in their head with an extra 20%, maybe more.
And if you're all about the free market, having reliable price points is one of the keys for real competition.
Why are the cell phone companies extending customers a near-infinite line of credit on the phone? What exactly makes them think that people are going to PAY a thousand dollar phone bill. It's sheer stupidity, they're sending out ludicrous bills and hoping to make it up on the suckers.
When I signed up for my Sprint plan, they did a credit check and capped my spending at $250. How hard is that? And how hard would it be to ask to have your plan capped to a certain multiple of your usual bill (say, 2x)?
I could understand advertising $39.95/mo exclusive of taxes, but the phone companies themselves tack on a bunch of other surcharges that are _not_ taxes. They make them sound like taxes by calling them "regulatory recovery fees", but they're really unadvertised price hikes that they can spring on you at will, even when you have a contractual price.
Make phone companies advertise their ACTUAL rate first. Then go after these warnings...
(It's for this reason I use a prepaid Tracfone; no surprises.)
And you sum up what's wrong with this nation. Retards who think anyone with compassion is lazy and nonsensical, and that democracy fails when their preferred leaders aren't in charge.
This is not a "protect people from themselves" issue. Things are purposely set up to maximize the possibility of you unintentionally racking up charges. A "Web" button that can't be disabled right next to the "Call" button. Smartphones that "phone home" over the data line even when data is disabled while traveling internationally. Huge, punishing charges if you go over your limit even by a tiny bit. (I mean seriously, if $40 a month will cover several gigabytes of downloads, why charge over $80 for 2.2 Megabytes of downloads without a data plan? Answer: Because they can.) Phone bills that lag 45 days or more behind your actual usage. "Services" that have a per-usage charge that isn't spelled out when you use them. (Teens typically fall for this.) The carrier not clearly communicating that you can turn a lot (but not all) of these "services" off by a simple request.
It's not just a matter of reading and understanding the TOS. We're all professionals here, we can really dig into a TOS and find the line buried on page 3 in the middle of paragraph six dealing with FCC regulations where they've buried the over usage fees. That doesn't cover everything -- there's ways to overinflate your bill that aren't covered by the TOS.
Mind you, my nephew was a fine counterexample. He was told that local calls on the weekends were free, and he thought he heard that all local calls were free. His first bill was the size of a paperback and well over a grand. To my knowledge the carrier is still looking for him. No matter how foolproof one makes a system, fools will find a way to crash land. But besides that, the system as it currently stands is designed to blow your hand off if you turn the knob to the left instead of the right, and that's the part that really needs to stop.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
They are "allowed" to advertise them. They are also not required, in any way, to charge them separately. That is, there's nothing that stops a company from advertising a $39.99 plan and when you get your bill, it's for $39.99. However, it's more profitable to list a phone plan at $39.99 and charge $45 for it, than to list it at $39.99 and charge $39.99 for it. They make the service stations advertise the after-tax price for gasoline. Why not the same with telecom? There's no reason we can't do it that way, other than the phone companies like to be able to advertise plans for below what the bill will be.
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