September 30, 2010

Udall Introduces Legislation to Reduce Cell Phone “Bill Shock”

Bill Would Require Text, E-Mail Notification before Customers Exceed Monthly Limits

WASHINGTON - U.S. Senator Tom Udall today introduced legislation to help limit the cell phone "bill shock" that occurs when cellular customers unwittingly exceed their monthly limits for voice minutes, text messages, or data usage.

The Cell Phone Bill Shock Act of 2010 would help protect Americans from "bill shock" by requiring cell phone companies to notify customers by email or text message - free of charge - when they have used 80 percent of their monthly limits under their current plan. It also requires wireless phone companies to obtain customer consent before charging for services that are not covered by their regular monthly service plan.

"Many Americans have been hit hard by ‘bill shock' and I am pleased to introduce legislation that provides additional consumer protections," said Udall, a member of the Senate Commerce Committee. "The texting and Internet capabilities that make today's cell phones more useful than ever should be applied to help customers avoid bill shock. Sending an automatic text or email notification to a person's phone is a simple, cost-effective solution that should not place a burden on cell phone companies and will go a long way toward reducing the pain of bill shock by customers."

Cell phone bill shock has become more common with the increased popularity of smartphones like BlackBerries and iPhones that have made it easier for Americans to exceed their service limits without knowing it. Examples cited in recent news reports include the case of a Navy ROTC midshipman who mistakenly left his smartphone's roaming function turned on while he was abroad - and returned home with a bill for almost $1,300. In another case, a teen's cell phone data usage led to a $22,000 bill for mom and dad, and another man was billed $18,000 for a six-week period when his son used a cell phone to connect a computer to the Internet.

The European Union already requires wireless phone companies to provide similar notifications to their customers when they have reached 80 percent of their monthly data roaming services.

A recent Federal Communications Commission survey found that 30 million Americans - or one-in-six adult cell phone users - have experienced "bill shock," and 84 percent said their cell phone carrier 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.