FCC Takes On Cellular Phone Bill Shock

Verizon has agreed to refund its customers about $50 million. The company was improperly charging them for data services such as browsing the web, checking email and using apps. Parul Desai of Consumers Union talks to Renee Montagne about the new rules the FCC is working on which would make it harder for cellphone carriers to shock consumers with big bills for data service.

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RENEE MONTAGNE, host:

Earlier this week, Verizon agreed to refund about $50 million to customers. The company was improperly charging them for data services, things like browsing the Web, checking email and using apps. We asked you, our listeners, if you've had similar experiences and we were deluged with responses.

Emily Snow is a Verizon customer from Roy, Utah.

Ms. EMILY SNOW: We started getting a lot of $1.99 charges. And one month we had four of them, so that was about $8 on our account. And it was because the button that turned on the Internet was one that was really easy to hit.

MONTAGNE: In Kingsville, Texas, Stephen Perritt opened his Verizon bill one day and found over $200 worth of data charges.

Mr. STEPHEN PERRITT: We pay for a data package thats unlimited. And when I noticed that they were charging us per megabyte, thats when I kind of flipped out and gave them a call and complained.

MONTAGNE: Stories from our listeners. And now let's hear from Parul Desai. She's a lawyer with the Consumers Union, which publishes Consumer Reports.

Good morning.

Ms. PARUL DESAI (Consumers Union): Good morning.

MONTAGNE: Now, over 800 of our listeners responded with stories. So how common is this, that people are getting blindsided by charges for using data on their phones?

Ms. DESAI: Well, I think this is increasingly becoming a problem. And, in fact, according to a recent survey by the Federal Communications Commission, some 30 million Americans have experienced cellular phone bill shock - which is a surprise spike unrelated to a change unrelated to a change in their service plan.

And according to the survey, more than a third of the group that they talked to got hit with at least a $50 a month overage charge. And we think the usual overage charges actually might be higher.

MONTAGNE: Let's talk about data. Unlike minutes, which are pretty easy to track, how hard is it to track how much data you're using on your phone?

Ms. DESAI: This industry has no oversight and there's no responsibility. So you know, some carries may provide you with a tracking system. They may notify you. But most people don't understand how much 50 megabytes is or two kilobits is. And so I think it's hard for cell phone users to really understand how much data they're using. And if they're not being alerted that they're about to go over, I think it is becoming increasingly a common problem, as you see with these high overage charges.

MONTAGNE: The FCC next week will release proposed rules to address this problem. What are some of the ideas out there?

Ms. DESAI: I expect that the FCC will consider what alerts or notifications should be provided to customers who are about to incur either roaming charges or who are about to exceed their voice, text or data limits.

I would also expect and hope that the FCC will propose notifying consumers of the various overage charges that they may incur if they're about to go over and the carrier would seek consent for those overage charges.

MONTAGNE: And how is the industry responding to generally these issues?

Ms. DESAI: I think generally the industry is suggesting that no standardized rules are necessary, that voluntary commitments and guidelines will suffice for the future. And like I said, some carriers have started to provide notice, like AT&T and U.S. Cellular.

But without any firm guidelines, it's confusing to consumers to even understand from carrier to carrier what those overage charges are or even to compare, since there is no standardized or consistent format.

MONTAGNE: So for the moment, consumers are left with watch your bill.

Ms. DESAI: Correct. Right now it's important for consumers to be vigilant about watching their bill, looking at the fees that are being charged and calling their carriers if they have any questions about their charges. And - as we saw in the Verizon case - if they're unhappy with the response that they're getting, to also inform the FCC of the issues that they're having.

MONTAGNE: Parul Desai is a lawyer with the Consumers Union, which puts out Consumer Reports.

Thanks very much for joining us.

Ms. DESAI: Thanks for having me.

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