Telco Opposition To Anti-Bill Shock Plans Doesn't Pass The Laugh Test

from the more-confusion? dept

Wed, Oct 13th 2010 12:55pm — Mike Masnick

It's been talked about for ages, but the FCC is finally preparing to take on mobile operator "bill shock," that happens when a user, unknowingly, goes way over their allotted time/data and is charged ridiculous overage fees, leading to the ever popular stories of multi-thousand dollar bills. The FCC plans to require mobile operators to at least alert users when they're nearing the limits on their plan. While I'm often skeptical of FCC actions, I'm having trouble seeing what's wrong with this, and the mobile operators protestations are so silly that it's difficult to take them seriously.

Mobile operator trade association CTIA has warned that these sorts of warnings would "cause customer confusion and frustration." Huh? How? And it's already established that it's the crazy huge bills that are causing customer confusion and frustration (and, um, anger). Then there's Verizon Wireless, quoted as saying that "intense competition has led wireless carriers to provide consumers with usage information." Hmm. Information like the phantom charges that Verizon Wireless denied for nearly two years, until it finally 'fessed up and agreed to pay back to the tune of $50 million to $90 million. Honestly, I can't figure out what the pushback is over actually warning customers before they get insane overage charges?

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Filed Under: bill shock, bills, mobile phones, telcos
Companies: ctia, fcc, verizon wireless

27 Comments

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Ima Fish (profile), 13 Oct 2010 @ 1:04pm

"Honestly, I can't figure out what the pushback is over actually warning customers before they get insane overage charges?"

You're not thinking hard enough. Or too hard. The simple fact is that carriers make a ton of money on these charges. If they're forced to warn customers about these charges, they'll make less money. Seems simple enough.
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E. Zachary Knight, 13 Oct 2010 @ 1:15pm

When a cell phone company can bill someone for $6,000 in overage charges and then give them a 1 time cut down to $1,500, what incentive is there to warn the customer before they go over their limit?
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fogbugzd (profile), 13 Oct 2010 @ 1:16pm

What is really needed is competition
True competition would solve most of the problems with mobile phone service in the US. This proposal would only fix one of many problems.

With AT&T being the largest campaign contributor in the US, it is hard to imagine even this modest proposal going anywhere. True competition would be an even worse nightmare for the industry, so I fully expect to keep paying outrageous prices for tiered service.
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Hephaestus (profile), 13 Oct 2010 @ 1:18pm

Re:
" If they're forced to warn customers about these charges, they'll make less money. "

The money as the root of all evil thing has really taken hold in the US. Do you expect anything less from people whose only goal and motto in corporate life is "just a little more"?
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Jimr (profile), 13 Oct 2010 @ 1:52pm

I simply added little know, yet free, feature from my carrier call 'data block'. A I do not have a data plan on my phone and see absolutely no need for it I never want to accidentally get data charges. I fetch data on my cell phone with it's WiFi ability on my home network.
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Anonymous Coward, 13 Oct 2010 @ 1:59pm

You have to mention it
How about a bill that requires Telco companies to know the difference between .002 cents and .002 dollars... (Verizon!)
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javajim (profile), 13 Oct 2010 @ 2:04pm

I agree but...
I agree completely that there should be very little problem (technically speaking) for the carriers to provide these notifications as a courtesy to their customers. Most likely it is money that motivates them to fight the idea. Having said that...

On the other hand, what happened to adults being careful with what they are doing? Example: does a bank have to let you know when your checking account gets down to below... 100 or 500 or whatever pre-agreed amount or is it your responsibility to monitor your spending such that you stop writing checks/using the debit card when you are out of money? I have kids on my family plan and I can tell you that I monitor usage on my carrier's web site every few days or so to make sure I am not surprised when the bill comes!

If you give your 12 year old (surprising how many folks do this) a cell phone and don't monitor what they are doing with it (not only for charges but other good reasons), whose fault is the overage really?

I had to laugh at recent ads by a carrier with a family crying HELP! our daughter keeps texting and our bill is out of control! She won't stop! The solution is not to get a better plan, the solution is, if your kid is texting you into the poor house and "won't stop when you tell them to"... TAKE THEIR PHONE AWAY!!!

Geesh!!!
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The Mighty Buzzard (profile), 13 Oct 2010 @ 2:07pm

Re: Re:
I'm thinking the people being vile fuckwads in corporate America would be vile fuckwads no matter what their lot in life. We just need to start sending people who cheat thousands of others out of their money the same way we do if it's only one or two people, put them in jail.
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panton, 13 Oct 2010 @ 2:14pm

Communication?
Pretty crazy to expect communication companies to communicate with their clients!
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interval, 13 Oct 2010 @ 2:15pm

Just Like The Banks
Its the same deal as the banks who made overcharging an "opt out" deal instead of "opt in", leading to charges that netted them billions, and when called on it said re-working the account schemes would lead to customer confusion. The bastards.
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Ron Rezendes (profile), 13 Oct 2010 @ 2:23pm

Ideally
I'd like to see them limit overage charges to whatever the company charges for unlimited service. So, if you have a plan that allots 300 minutes for $30/mo. and for some reason you go hog wild one month, the most they should be able to charge is the unlimited minutes price since that is where your usage fell into the price scheme. Not sure how they would claim to lose money and bill shock could only equal the difference between your plan and the unlimited plan. I know it's way too easy to see how pro-consumer this would be but I'm sure someone will claim that this is unethical, wrong, anti-business or whatever catch phrase they are in love with at the moment.
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The Infamous Joe (profile), 13 Oct 2010 @ 2:30pm

Re:
Why stop there? Get rid of the cell phone altogether and get a land line, only receiving or sending calls while on your home phone. One less bill!

However, those of us who embrace technology, we're tired of being screwed.
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Derek, 13 Oct 2010 @ 2:40pm

the [telco] doth protest too much, methinks
We can help the friendly telcos by making sure their generous, customer-oriented billing practices get lots of publicity.
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rabbit wise (profile), 13 Oct 2010 @ 2:53pm

Re: I agree but...
I think that the people that are able to be "careful with what they are doing" are not the people that are getting hit with these bills. The people that are getting hit with these bills are the people that are not mobile (or otherwise) technology savvy.

And saying, well, they should know better? Really? Banking has been around a long time. Mobile phones? What, realistically? 10-15 years? And probably the majority of the population, much less? How long have smart phones really, and I mean really, outside of the tech savvy communities have smart phones been out and about?

I'm tired of people like me who should know better spouting off that people who are not tech savvy should just know. A lot of these people don't even know the difference between WiFi and data. They don't even know that they don't that. And it isn't in their company's interest to tell them. It isn't in their company's interest to put documentation where someone can find it and written in understandable language to ensure that these people "know better".

And Heck Yeah to the rest of what you said about kids, parents and phones.
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Jay (profile), 13 Oct 2010 @ 3:31pm

Re: Re: I agree but...
I beg to differ.

I believe the people hit with these bills are those that are traveling a lot more.

Say I move to Japan for a few days and my iPhone is constantly connecting to the towers there. I don't want to think about the roaming charges that may accrue because I'm using my service outside of the US.
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Chargone (profile), 13 Oct 2010 @ 3:42pm

Re: Re:
just, you know, fyi here. it's 'the love of money is the root of all evil', not money itself.
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Steve R. (profile), 13 Oct 2010 @ 3:50pm

Farcical
Cell phone companies are technological companies. They brag about all the features the phones possess that serve the user. Yet when it comes to a simple notification of "abnormal" charges or a "safety switch" that prevents an unintentional web connection, these companies seem to all of a sudden become technologically incompetent. Relative reality at work.

Today, on the Glenn Beck show, Glenn had a long monologue on restoring honesty to the US. What is troubling, is that many erstwhile Libertarians when it comes to deceptive business practices never seem actually acknowledge that those misleading business practices are part of what is wrong with the US. They can only shrilly scream the single minded mantra that government regulation is "bad", while refusing to accept the concept that these businesses are being dishonest. For the anti-regulation crowd, if a business cannot conduct itself responsibly they should loose their freedom to operate without regulation. Freedom is not a license to steal.
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thePoet, 13 Oct 2010 @ 5:13pm

Re: Re:
ahem. The saying coming from the bible actually says "For the love of money is a root of all kinds of evil." The love of money, not the object itself :)
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Alias (profile), 13 Oct 2010 @ 6:31pm

Re:
My thoughts exactly. It's affects the telco's bottom line, plain and simple.
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Verizon Employee, 13 Oct 2010 @ 7:27pm

Re: You have to mention it
You mean there is a difference?
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Anonymous Coward, 13 Oct 2010 @ 7:31pm

Re: I agree but...
"On the other hand, what happened to adults being careful with what they are doing?"

To the extent that they charge for things they don't tell customers that they are going to charge for I would say they border on fraud. and to the extent that they defraud us it's not really our fault. It's the governments job to prevent fraud. If I get into an agreement and all of a sudden the other person starts throwing stuff at me that I never agreed it's not my fault for refusing to comply and for insisting that the govt prevents this kind of behavior.
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dpeek (profile), 14 Oct 2010 @ 12:44am

Re: Re: Re: I agree but...
So long as US iPhones behave the way UK ones do you have to deliberately turn on Data roaming.

However since European Mobile operators manage to track roaming in real time (EU law sets a cap on the Data charges when roaming unless you've made a prior arrangement with your provider, so they have to be able to stop use after �20 worth of data has been used) I wonder how American companies can claim to only exchange data usage info at anything less then a few minutes delay.
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abc gum, 14 Oct 2010 @ 6:05am

Re: Farcical
"f a business cannot conduct itself responsibly they should loose their freedom to operate without regulation."

The banking industry is a good example. The mess today is not the first one they have made.
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Anonymous Coward, 14 Oct 2010 @ 6:16am

"On the other hand, what happened to adults being careful with what they are doing?"

The telcos long ago hired consulting companies to analyze their bills they send to customers. They pretty much made sure that the actual bills sent are confusing and hard to read. Why did they do this? Longer bills cost more money to create and mail, one would think that they would want to make them as light and simple as possible. Of course the answer is that if a customer can't understand their bill, they will have more revenue. They paid consultants to actually do this. It isn't an accident, it isn't a "mistake" it was a revenue plan.

As for banks and adults being responsible, you do know that the vast majority of banks use a software program that looks at every account and the balance and then orders the checks in a manner that ensures high fees are not lost. How does it work? Say you have 10 checks come to the bank today, your account balance is $100. The last check presented was for $100 and the other 9 checks are for $1. The software kicks off and clears the $100 check first instead of last as it was presented. Then the 9 $1 checks (which came in first) are processed and of course each of them bounced and you are charged fees on each check. Instead of 1 bounced check, you have 9.

Nice, isn't it?
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Anonymous Coward, 14 Oct 2010 @ 7:08am

Still don't have a cell phone. I used to be in the Telecom business as a programmer for their servers and they just simply steal from you. With little or no regulation the telcos have turned into the corporate nightmare. The only reason anything happens in Washington is because a congressman or senators Mom or someone else they know got screwed by the telco. I still have my land line (cheap) and my answering machine and I use as little services as possible. I know, no one can get a hold of me if I am not there. Thank FRAKING GOD, I get a little space, peace and quiet. I actually go outside and don't get bothered.
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Steve R. (profile), 14 Oct 2010 @ 8:01am

Customer Responsibility??
As AC pointed out, these companies have structured their business practices to make it "impossible" for the consumer to avoid "accidental" fees.

One of my daughters was charged, by a bank, for several bounced checks as highlighted by AC where only one check should really have bounced. Even that was debatable since she claimed that she had deposited a check to cover her balance.

We need to realize that this is not simply a case of consumers being responsible, it is a case of the companies gaming the system for their benefit. So lets put the blame where it belongs, on the corporations.
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vastrightwin, 14 Oct 2010 @ 10:53am

I get laughed at
when people see my simple flip phone. They assume I should have at least some kind of "smart phone" because I'm in the high tech field. Truth is, I'd love a fancy data phone with touch screen, but I don't trust any of the carriers because of all the non-sense I've read about. Instead, I have a MiFi and it works great. I chose Virgin Mobile's $40 unlimited plan and I only buy data when I need it. My phone is only a phone. So far, so good. Besides, non of the fancy phones allow tethering using WiFi (only blue tooth), so it limits the number of devices I can use. When carriers become more flexible, I'll reconsider.
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