FCC Finds 30 Million Americans Experience Mobile Bill Shock

IT Management

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The Federal Communications Commission has released the findings of an agency survey on the consumer mobile experience that found 30 million Americans have experienced "bill shock," a sudden increase in their monthly bill that is not caused by a change in their service plan.

In addition, the survey found nearly half of cell phone users who have plans with early termination fees (ETFs) and almost two-thirds of home broadband users with ETFs don't know the amount of the fees they are responsible for.

FCC-Julis-Genachowski "The FCC's consumer survey provides an important snapshot of the real-world experiences of mobile customers," said FCC Chairman Julius Genachowski.

"The wireless industry has achieved remarkable innovation -- and mobile is increasingly essential to the daily lives of Americans.  But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace. A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees."

The amount of bill shock varies widely but if often sizeable. More than a third of people who experienced bill shock said their bill jumped by at least $50, and 23 percent said the increase was $100 or more.

When it came to early termination fees for cell phones, 54 percent said they would have to pay an EFT if they ended their contract before it expired, and 18 percent were unsure if they would have to pay an ETF. Among those who are subject to an ETF, 43 percent said it was $150 or more, but 47 percent did not know how much it was. Only 36 percent of cell phone customers who are familiar with their bills said that they include "very clear" information on ETFs.

The findings were similar for home broadband termination fees. Only 21 percent of home broadband users said their contracts include an early termination fee. Among those 64 percent don't know what the fees, a higher level of confusion than for cell phone service.

"These findings support our ongoing efforts to help consumers get better information on these charges and fees," said Joel Gurin, Chief of the FCC's Consumer and Governmental Affairs Bureau.

"As we know from our consumer complaint center, even an unexpected charge of $20 or $30 can make a difference to many people. Several carriers are taking steps to make their fees and billing more transparent, and we would like this to become a universal practice. We're confident that we will be able to work with both wireless carriers and public interest groups to help consumers avoid these unwelcome surprises."