June 25, 2010, 7:17 AM — by Bill Snyder, CIO - San Francisco resident Bridget S. (she asked that her last name not be used) nearly fell out of her chair when she opened her T-Mobile wireless bill a few months ago and learned that she owed the company nearly $800--about 16 times her usual charge. "I couldn't believe it. I was just shocked," she told me.
A recent survey by the FCC found that about one in six cell phone users has experienced what the agency appropriately enough calls "bill shock," an unexpected spike in a monthly bill unrelated to a change in contract or service.
[For more money-saving tips, see CIO.com's recent article Sneaky Fees: Hidden Charges Add Up for Tech Users. ]
In Bridget's case, an illness and some other personal matters caused her to spend a lot of time on the phone with family and friends. She concedes that she probably did make the calls, but wonders why T-Mobile didn't tell her that she was exceeding her monthly allotment.
FCC Hears More Gripes
The FCC has been wondering about that issue as well--and is considering rules that would force wireless providers to notify customers when they start to run out of voice or data minutes. "We are hearing from consumers about unpleasant surprises on their bills," Joel Gurin, FCC Chief of the Consumer and Governmental Affairs Bureau said in a press release last month. "This is an avoidable problem. Avoiding bill shock is good for consumers and ultimately good business for wireless carriers as well."
One obvious solution to bill shock would be an alert from the provider when customers get close to their monthly limits. But the FCC survey found that no more than 16 percent of those bill-shocked consumers got a heads up when the usage meter redlined.
When I asked T-Mobile about this issue, all I got back was a suggestion that its customers use the company's free service that sends them a text message detailing how many minutes of their allotment remain and how much money they owe.
That's better than nothing, I guess, and I'll admit that consumers have a responsibility to keep track of their minutes, just as they should keep track of their credit card purchases. But that's not always easy, and it's hard to believe that the wireless companies don't have an ulterior motive here: You guessed it, more money.
Big Penalties Per Minute
According to Consumer Reports, consumers pay 35 cents to 45 cents a minute for minutes over their allotment, compared to an average base charge of six cents a minute, an increase of up to 650 percent. That explains why 23 percent of the consumers who experience a sudden spike in their wireless bill said the increase was $100 or more.