Sen. Tom Udall, D-N.M., just introduced the Cell Phone Bill Shock Act of 2011. This marks a renewed federal push to require that mobile phone operators have a customer’s consent before charging for services in excess of monthly voice, text or data-usage limits.
The FCC fielded more than 750 “bill shock” complaints from mobile phone customers last year, the largest shock being a bill for $68,505. The FCC estimates that 30 million Americans have experienced sudden, unexpected increases in their mobile phone bill, and 84 percent of consumers stated that their mobile operator did not contact them when they were about to exceed their allowed service limits. In about one in four cases, the bill increased by more than $100.
This legislation follows the lead of European regulators. The new rules mandate that mobile operators immediately alert subscribers when they are about to incur higher rates for roaming onto other networks, depleting minutes, or going beyond their plan’s data-use limitations.
This makes sense for consumers. Mobile phone contracts can be confusing and may feature complex rules that often go unread. The majority of mobile phone bill shock complaints stem from legitimate fees, but consumers simply weren’t aware of the costs their usage would cause them to incur.
Some scenarios that could lead to bill shock are:
Bill shock has become an issue in the mobile phone industry because both carriers and their customers struggle with billing complexity.
However, a new wave of regulation is unlikely to send mobile operators scrambling to implement excess-usage notifications. Many major mobile operators already have in place the software platforms that can automatically notify customers when they reach a usage threshold.
These systems also leverage customer data and suggest tailored products. As a result, billing transparency combined with tools that help consumers track usage and suggest plans tailored to individual needs are becoming competitive assets. In much the same way that personal finance tools can differentiate among competing financial institutions, billing transparency tools have the potential to become a competitive differentiator for mobile operators.
So smart operators are ahead of the game. They recognize that once a month isn’t an acceptable frequency for customers to receive vital billing information, and they have responded accordingly. In an age of Twitter, texting, Facebook and nearly ubiquitous smartphones, the ability for operators to provide users with real-time billing information isn’t difficult.
The “shock” part of “bill shock” can be a thing of the past, thanks to timely, automated communications from providers. Consumers can make empowered decisions about their mobile phone usage, and when the monthly bill is not a surprise, they will be less likely to complain and more likely to renew their contracts.
BOB LENTO is president for information management at Convergys Corporation. He wrote this for this newspaper.
