Commentary

Alerts To Avoid 'Shock Bills' Would Help Consumers And Carriers

Bride of Frankenstein

For the first time, Verizon Wireless became the world leader in mobile data revenue in the first quarter, with $4.5 billion in sales. That total might've been even higher had the company collected an $18,000 cell-phone bill from a Boston-area man whose son had racked up that amount in charges over six weeks by tethering the phone to a PC to connect to the Web.

Bryan St. Germain said he didn't know a two-year promotional period, which included free Web access, had expired when his father renewed the family's cell plan. After years of wrangling over the whopping charges dating back to 2006, Verizon last week decided to forgive the bill after deeming it "uncollectible," according to a Boston Globe article.

The move comes only about a week after the Federal Communications Commission announced it would begin looking into numerous complaints about "bill shock," where consumers are hit with unexpectedly high bills. Unclear or misunderstood advertising, unanticipated roaming or data charges, and other problems can lead to unpleasant surprises in cell bills, according to the FCC.

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Like credit card bills, cell-phone statements have become notorious for presenting pages of fine print and footnotes obscuring key contract terms about various fees and charges. Even CTIA President Steve Largent admitted in an interview with CNet last week that carriers "may not have always been very sensitive to some of these billing issues." But he insisted operators aren't hoping people inadvertently run up huge bills.

For its part, Verizon told the Globe that bills like St. Germain's are "exceptionally rare given our policy of clear disclosure of price plan details at the point of sale and through confirmation letters..." Verizon did the right thing by agreeing to forgo the charges, at least from a PR perspective. But if it was such an aberration, then why didn't the company agree to forgive the bill sooner?

The FCC is now seeking public input on ways to alert consumers about high charges before they start stacking up, as with St. Germain. The European Union, for instance, requires carriers to send users a text message if they're about to incur costly roaming charges or are nearing data-usage limits for a given month. But from Largent's comments on CNet, it doesn't sound as if the industry is ready to adopt a similar mechanism here.

That's not surprising, given that the major wireless operators don't typically embrace additional rules or regulations. But in this case, a simple text alert could benefit carriers as well as consumers by keeping people from piling up astronomical charges that operators won't be able to collect.

2 comments about "Alerts To Avoid 'Shock Bills' Would Help Consumers And Carriers ".
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  1. Carolyn Hansen from Hacker Group, May 18, 2010 at 6:18 p.m.

    I had the experience of running up an exceptionally high bill just a month ago. I called AT&T to change my plan to fit my new usage patterns -- and the rep immediately backdated the new plan to the previous month, saving me about $160. It didn't even occur to me to ask for such a thing, but you can believe it made me very happy. I suppose if it had been $18,000 they might have been greedier, but still . . . I thought it was impressive.

  2. Dennis Ryan from Element 79, May 19, 2010 at 6:51 a.m.

    I just use Cricket. $60 month, unlimited talk, text, web. No overages, no contracts, no surprises.

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