CR wireless phone findings sent to Congress/FCC

Thursday, December 9, 2010

Consumers Union Sends Consumer Reports Wireless Phone Findings to Congress and FCC, Urges Crackdown on Cell Phone “Bill Shock,” Provider Practices

WASHINGTON, D.C. – Consumers Union, the nonprofit publisher of Consumer Reports magazine, today is sending letters to Congress and the Federal Communications Commission (FCC) to urge them to crack down on cell phone “bill shock” and other problems facing wireless-phone customers, pointing to the magazine’s latest issue on cell phones and plans.

The article in Consumer Reports’ just-published January 2011 issue describes how common it is for consumers to be hit with surprise charges on their wireless bills. In a September 2010 survey the magazine found 1 out of 5 respondents reported receiving an unexpectedly high bill in the previous year, often for exceeding the plan’s voice, text, or data limits. Half of them were hit for at least $50, and one in five more than $100.

The magazine cites the FCC’s recent proposal that wireless carriers be required to send customers alerts before they incur hefty overage fees. “We support that customer-friendly idea, a no-brainer that should be a snap for today’s sophisticated smart phones,” the magazine says.

Parul P. Desai, policy counsel for Consumers Union said, “The FCC needs to take action to ensure consumers are notified when they approach their usage limits. Consumers should consent to overage charges before being penalized.”

Other concerns mentioned in the Consumers Union letters to Congress and the FCC include provider practices that Desai says “continue to limit consumer choice in the marketplace.”

In the letter to Congress and the FCC, Desai wrote, “While competition and innovation exists among devices – especially smart phones – consumers still do not have the option of using these devices with their carrier of choice, which often results in consumers having to put up with continued poor service. Exclusive deals and early termination fees limit the ability of consumers to switch providers if they are dissatisfied with the service of their provider.”

In the letters to lawmakers and regulators today, Consumers Union is including the full Consumer Reports article, which includes satisfaction surveys for phones and plans, as well as tips for how to compare products and save money. The following is the text of Consumers Union’s letter to the Senate, which is similar to its letters to House members and the Commission. For copies of these letters and the Consumer Reports article, contact David Butler at Consumers Union at 202-462-6262 or dbutler@consumer.org

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December 9, 2010

Dear Senator:

Re: Consumer Reports Cell Phone survey

I write to share with you an article in our January issue of Consumer Reports® magazine. The article discusses consumers’ experience with the current cell phone market. While the article has a number of data points that may be of interest to you, I would also like to take this opportunity to raise some issues that effect consumer choice and consumer pocketbooks.

It is clear from the recent survey that consumers continue to be greatly affected by “bill shock.” Consumer Reports® found that 1 in 5 respondents had received a higher than expected bill. Half of them were hit with least $50 in overage charges, and one in five was hit with more than $100 in overage charges.

We also are concerned with provider practices, which continue to limit consumer choice in the marketplace. While competition and innovation exists among devices – especially smart phones – consumers still do not have the option of using these devices with their carrier of choice, which often results in consumers having to put up with continued poor service. Exclusive deals and early termination fees limit the ability of consumers to switch providers if they are dissatisfied with the service of their provider.

We urge Senators to address these important pocketbook issues as soon as possible, especially in light of these difficult economic times for consumers.

Respectfully Submitted,
Parul P. Desai
Policy Counsel
Washington Office