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FCC Cracking Down on Cellphone ''Bill Shock''

- By - Source : Tom's Guide US

The FCC is cracking down on hidden fees and incomprehensible contracts.

Thursday Federal Communications Commission (FCC) chairman Julius Genachowski will propose rules that will force wireless carriers to alert subscribers when they have reached their monthly usage limits and are about to rack in extra charges. Consumers will be informed either by voice or text messages.

If accepted, the proposals could put an end to "bill shock," a state of confusion stemming from attempting to decipher the bill and associated unspecified fees. Additionally the commission may also impose rules that force wireless carriers and mobile Internet companies to alert consumers before they incur roaming charges or other unusually high rates that are not covered by their monthly data plan.

Naturally wireless carriers and mobile Internet companies--and their associated trade groups--strongly oppose the proposals. Verizon actually agreed that subscribers should have access to clear information regarding their wireless usage, however fierce competition has forced Verizon and other carriers to provide tools that allow customers to monitor and control their usage in various ways.

But the commission doesn't think that's enough based on the hundreds of complaints sent in by consumers regarding unexpected charges. FCC officials said that most charges stem from the consumer's misunderstanding of the signed contract, and isn't fraud on behalf of the carrier. In turn, wireless carriers should provide contracts and usage limits that are easier to understand. They should also spell out data limitations.

"Most people still don’t know what a megabyte is," Genachowski said. "So it’s hard to expect them to know when they have reached their limits."

Genachowski also praised Apple for the way it handles data usage on the iPad. Consumers receive a message when they're about to reach their monthly limit, or when they're about to hit the plan's usage cap. "But that has been the exception and not the rule," he said. "The magnitude of consumer complaints about bill shock has been very significant."

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stm1185 10/14/2010 1:04 AM
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braneman 10/14/2010 1:06 AM
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sounds nice, now if we got more infrastructure here in America we could have $4 100 mbps internet like they do in Tokyo. rather than 256k 10gb's capped monthly with an extra $10 for every gb after that.

formin 10/14/2010 1:09 AM
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about time

jojesa 10/14/2010 1:23 AM
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Wow...it took the FCC years and thousands of complaints and still they have doubts.
Please grow a back bone and take consumers side for a change.
Sometimes we get even charged without even going over the plan minutes.

duckmanx88 10/14/2010 1:23 AM
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sadly lobbyists will be sent to washington and the pockets of politicians will be filled with money by the cell carriers to stop any form of legislation to stop these shock bills and outrageous prices for both cell and internet service.

cloakster 10/14/2010 1:24 AM
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Its 2010, people should know what a megabyte is. I know the Wireless Providers are terrible and love taking our money, but it isn't the over limit charges that are the problem, its the small limits that are.

omnimodis78 10/14/2010 1:24 AM
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"...hundreds of complaints sent in by consumers regarding unexpected charges..." - no way that's all they have - hundreds - they must have hundreds of thousands! It is unbelievable that these companies operate, in fact, almost encourage consumer ignorance so that they can make surreal amount of dough! Same thing is happening up here in Canada...it's unreal. Europe has sorted this out years ago, and so did South Korea, Japan, Taiwan and China.

Marco925 10/14/2010 1:28 AM
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Quote :Thursday Federal Communications Commission (FCC) chairman Julius Genachowski will propose rules that will force wireless carriers to alert subscribers when they have reached their monthly usage limits and are about to rack in extra charges. Consumers will be informed either by voice or text messages.


Why stop there? why not target Land ISPs as well? All of them evil!

nukemaster 10/14/2010 1:50 AM
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There are hidden fees on so many items now. eco fee comes to find. Just add it into the price of the product.

AMD_pitbull 10/14/2010 1:52 AM
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cloakster :
Its 2010, people should know what a megabyte is. I know the Wireless Providers are terrible and love taking our money, but it isn't the over limit charges that are the problem, its the small limits that are.


It might not mean that people dont know what a megabyte is with regards to actual amount, but, with relation to compression of data on the phone.

Anyways, the cellphone companies can complain all they like, but, I live in a border town (Windsor, Ontario) and Roaming charges are incurred from making a call in your own home sometimes. 1 or 2 companies have changed this, but, you can get a $300 phone bill cuz you called home from work, and they said you were over in the states, and it can take a lot of fighting just to get that fixed. Also, do we not remember the article not too long ago that stated that cellphone development was actually influenced to make it easy to "accidentally" open a browser and start incurring more data usage charges?

Hunter844 10/14/2010 1:53 AM
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So when they send me this text, I guess I'll get charged for that too.

zerapio 10/14/2010 2:04 AM
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applegetsmelaid 10/14/2010 2:17 AM
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beayn 10/14/2010 2:19 AM
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Cell phone companies are no different than your typical sidewalk scammer. I've been ripped off by every cell company I've been with and now I simply go without one. Canada has it worse than American companies in terms of contracts, roaming, texting and other retarded charges. Hell, I was even charged $1.74 every month in interest from one company because I was "late" paying my bill. The bill date was the 8th and it was postmarked the 27th and it was due on the 29th (21 days from bill date), meaning it was late when I got it. This does not even get into data charges, texting charges (before unlimited was common), roaming charges (a french antenna was near my house and I'd often get that instead of my cell company), dropped calls, long distance charges on top of roaming... the list goes on.

People who have text bills of $4000 because they thought they had unlimited is just a misunderstanding and the company should waive such bills. I mean how hard is it to retroactively apply an unlimited plan for the customer??

Instead they send it to collections and screw their customers out of thousands when the actual cost of the service was next to nothing for them and it could have been a quick billing fix.

mayne92 10/14/2010 3:21 AM
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These spammers sites (from wesdefee and look77) are actually the same site with just what seems like virtual domains; same layout but different colors haha. Bad english all over it, sketchy "About Us" in the last paragraph...and the CMZZ animated icon is Chinese...Hmmmmmm. I love crap like that...

jimmysmitty 10/14/2010 3:38 AM
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In honesty I do understand it. Now with a smart phone, you can check usage easily with an app. With 3G and lower phones, not so easy. My EnV Touch had problems loading the 'My Verizon' page while my LG Ally loads it nice and easy.

The Verizon website is easy to use but not everyone does. I for one am suprised we even have limits. Its so cheap for providers like Verizon (especially when multiple carriers piggyback on the large carriers and pey em for it).

But with time it will get better and the next generation of people wont need the same stuff. But the baby boomers do. My mom can barley get her Storm to work so I doubt she knows how to use everything as easily as I do.

gmarsack 10/14/2010 4:47 AM
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This happened to me. Went to the Verizon store, spent over 400.00 on phones, bought a data plan (for my phone - Moto Droid), then I got my first phone bill.. $800.00. Little did I know my wife assumed her phone had a data plan too. Ended up having to pay $600.00 of it, only after arbitration. So in just over a month, I spent over 1000.00! Needless to say, I'm in favor of the FCC plan. Had I been notified, this never would have happened.

Anonymous 10/14/2010 4:48 AM
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wow where was this over the last year when verizon kept hitting us with random bills over 1000$

jj463rd 10/14/2010 4:51 AM
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Cell Phone service is exhorbantly overpriced to begin with.
I just had my first cell phone last year and when the contract is up
I will go back to landline.Internet service on the other hand is an outstanding value and completely worthwhile,necessary too.

Anonymous 10/14/2010 4:54 AM
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I am sorry but this is a huge scam and has gone on long enough. Are the powers that be telling me that wireless is much more expensive to manage and operate compared to land lines which need to be physically installed, telephone poles every hundred feet or so. I pull down a fair amount of high def T.V. channels. It is all a tightly controlled monopoly. Open up the airwaves a bit more. It is about time.

keczapifrytki 10/14/2010 5:11 AM
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Thank you FCC. I went to Mexico with my wife for a week long vacation. When we came back they wanted to charge us $400 for her iphone usage. We never called, or texted or browsed the web. They told us that the iphone constantly searches for connection and that racked up our charges. $400 of charges, ridiculous. Eventually they dropped the charges after I emailed Toms, cnet, and others for help. So once again, thank you FCC.

Amen2That 10/14/2010 7:49 AM
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It's not something every user will know but most smartphones will periodically pull data. Whether it's syncing contacts with the cloud, an POP or IMAP request to check for new mail, a background app to updates your twitter account, these small data inquiries quickly add up. If you travel a lot, consider unlocking your iPhone and using a prepaid SIM from that countries local carriers. Alternatively, buy an unlocked GSM quadband phone to use during your travels. These are inexpensive ways to still use your phone during an international vacation.

It'd be nice if the carriers alerted you when you hit your monthly usage limits and when your bill hit a certain level (i.e. at $500, $1000, etc). It'd be even better if users we're allowed to customize these alerts. Some of my credit cards already allow me to do this and I'd like to see something similar implemented with the cellphone carriers if they have not already done so.

techguy378 10/14/2010 9:14 AM
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applegetsmelaid :
What the hell is a megabyte?


So Apple fans (judging by your user name) aren't just computer illiterate, they also don't have much of a brain since they're willing to spend double on a PC just to get a picture of an Apple on the case.

techguy378 10/14/2010 9:18 AM
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keczapifrytki :
Thank you FCC. I went to Mexico with my wife for a week long vacation. When we came back they wanted to charge us $400 for her iphone usage. We never called, or texted or browsed the web. They told us that the iphone constantly searches for connection and that racked up our charges. $400 of charges, ridiculous. Eventually they dropped the charges after I emailed Toms, cnet, and others for help. So once again, thank you FCC.


There is an option on the iPhone to turn off data while roaming. It's enabled by default. If you somehow disabled the option I don't see how this is your phone company's fault.

eddieroolz 10/14/2010 9:45 AM
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This is nice change of pace. Also while at it, why not implement new laws that require accurate billing information to be displayed for online accounts?

I recently was charged by Rogers for going over my text message limit. Their online account allows users to see their standing with regards to minutes, data and messages. But guess what? It isn't available half the time, and even when available usually the information won't load anyway.

Long story short: make it so that customers have a way to check their current usage, and make it actually work 24/7.

back_by_demand 10/14/2010 2:10 PM
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I am so glad my O2 account in the UK is easier to work out than these stupid US carriers, £7.50 per month bolt on to my standard contract and I get unlimited data, (that's $10 in funny money).

Maybe instead of using the FCC as a crutch, consumers should exercise market forces power and buy into a acrrier that provides the most transparency, after all despite the FCC the only thing these companies pay attention to is the bottom line.

tommysch 10/14/2010 4:48 PM
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applegetsmelaid :
What the hell is a megabyte?



Obvious troll is obvious.

bildo123 10/14/2010 5:00 PM
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Hunter844 :
So when they send me this text, I guess I'll get charged for that too.



Notification texts are free.

amdwilliam1985 10/14/2010 5:02 PM
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back_by_demand :
consumers should exercise market forces power and buy into a acrrier that provides the most transparency



The only problem is that we can't find such carrier in the U.S.

dustcrusher 10/14/2010 6:07 PM
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back_by_demand :
Maybe instead of using the FCC as a crutch, consumers should exercise market forces power and buy into a acrrier that provides the most transparency, after all despite the FCC the only thing these companies pay attention to is the bottom line.


amdwilliam1985 :
The only problem is that we can't find such carrier in the U.S.


This. We can ditch wireless completely (good luck), live with it/minimize the pain by paying for an unlimited plan, switch to a small provider (dunno about everyone else but Cricket's coverage here is awful), or use a prepay phone (which is only cost-effective for non-typical users).

Even if we go with a regional carrier or use prepay, the big carriers still profit. Who owns all the towers?

For anything but a smartphone, features like texting and mobile web should be opt-in, not opt-out. If some jerk text-spams a user, why should they have to argue to get the charge removed? That should be a no-brainer. If a user fat-fingers and starts the browser on their featurephone by accident, why do some carriers charge for 1 MB of "data usage" even if they didn't actually load a single page?.

There is no logical reason why someone can't get a phone for voice only and not have to worry about surprise data/text/other feature charges except that it hurts carriers' profit. The problem is that overage is the biggest revenue stream for the carriers, hands-down; overage costs the carrier next to nothing so the profit margins are gigantic. So, naturally, the carriers are going to fight this tooth and nail.

I worked at Sprint a long time ago. They had a system for people with bad credit called Account Spending Limit. The system would cut off the phone entirely if the customer's total charges reached a set dollar amount. The customer would have to pay some or all of the bill to restore service (911 calls and customer service calls continued to work, of course). For every customer that pissed and moaned about having their phone cut off, 5 more would say they liked it or would ask for it to be put on their phones (which we couldn't- yet another way our credit system punishes the responsible). It ensured that these customers wouldn't get up to four-digit account balances they had little to no hope of every paying back.

This was in 2001. There is no excuse for not having it now.

Sorry, I know that was a lot. I'll stop ranting now.

Conner Macleod 10/14/2010 6:51 PM
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The biggest problem I have with cell phone carriers, Verizon Wireless to be specific, is their double billing practices, which is made worse by double talk in their explanation of the charges.

The problem is caused by their billing method, which is that they pre-bill 1 month in advance, which is insane, no other company does this. So when I'm paying for February, I'm actually paying for March, and this is where the double billing comes in. If I make any change to my current plan, I'm billed on my current monthly charges as well as the next because they double bill. Whenever I've called and complained about it, they give me some double talk about billing in advance, and the date it takes effect, it makes absolutely no sense whatsoever. Once I spoke with the tech support's supervisor and got my bill reduced by 2/3s but they won't admit that they're wrong and highly unethical with how they bill people.

The first time I signed up with them I was billed twice because I signed up in the middle of the month! I kid you not, I was billed for May and June at the same time, before I had even used the phone for one month. It's flat out highway robbery the way Verizon and other companies operate.

Ironically scam artists are arrested for this all the time, whether it's a phone scam or a con artist using some type of card trick at a casino, but when phone companies do it to millions of customers on a monthly basis, it's simply routine. It's kind of like the quote by Stalin: "If you kill one person, it's called murder, but if you kill millions it's a statistic." Same principle applies to cell phone companies, they're getting away with murder.