Legislation would take aim at cell phone 'bill shock' by requiring warnings

Sen. Tom UdallThomas (Tom) Stewart UdallIT modernization measure included in Senate-approved defense policy bill Live coverage: Sanders rolls out single-payer bill Where Dems stand on Sanders's single-payer bill MORE (D-N.M.) unveiled a bill on Thursday that would attempt to limit cell phone "bill shock" by requiring carriers to notify customers when they are close to exceeding their monthly allotment of calls and messages.

The Cell Phone Bill Shock Act of 2010 would require mobile phone companies to notify customers by e-mail or text message when they have used 80 percent of their monthly limit for voice minutes, text messages or data usage. Wireless companies would also have to obtain customers' consent before charging them for services not covered by their monthly service plan.

“Many Americans have been hit hard by ‘bill shock’ and I am pleased to introduce legislation that provides additional consumer protections,” Udall said in a statement. “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 e-mail 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.”

A survey from the Federal Communications Commission cited by Udall notes that 30 million Americans, or one in six adult cell phone users, have experienced "bill shock," with 84 percent saying their cell carrier did not contact them when they were about to exceed their monthly limits. Roughly 25 percent of the time, users reported increases on their monthly bill of $100 or more.

Bill shock often takes place when a customer unwittingly exceeds his monthly limit for voice calls or messages but continues to use his phone, often paying significantly higher rates per minute or message. Examples cited by Udall include a Navy ROTC midshipman who left his phone's roaming function on while abroad and returned home to a bill of almost $1,300. Similarly, Udall pointed to two reports of teenagers whose mobile data use resulted in bills of $18,000 and $22,000 for their parents.