WASHINGTON (Reuters) - One in six American mobile phone users have been shocked by surprise fees and charges in their monthly bills, according to a survey that regulators said highlights the need for more transparency by wireless companies.
The findings were announced on Wednesday by the Federal Communications Commission, which is mulling a proposal to require cell phone companies like AT&T Inc and Verizon Wireless to alert customers before charges add up to shocking totals on their phone bills.
The proposal also would affect Sprint Nextel and T-Mobile, the U.S. unit of Deutsche Telekom AG. Verizon Wireless is a joint venture between Verizon Communications Inc and Vodafone Group Plc.
The FCC has increasingly focused on consumer protection issues surrounding mobile phone charges including fees associated with ending a contract early.
Last week, the agency omitted the key phrase of “effective competition” from an annual report to describe the wireless industry, a situation FCC member Michael Copps blamed on consolidation in the industry.
The survey, conducted by Abt/SRBI and Princeton Survey Research Associates International from April to May, estimated that about 30 million American mobile users have experienced bill shock.
More than a third of those who experienced bill shock said their bills jumped by at least $50, and 23 percent said the increase was $100 or more, according to the survey of 3,005 American adults.
The survey also found that almost 40 percent of home broadband users did not know if they had to pay an early termination fee.
FCC officials said early termination fees are a factor that can keep customers from switching carriers when they are not happy with the service.
FCC Chairman Julius Genachowski said in a statement that more needs to be done to help consumers navigate a “confusing marketplace.”
In a call with reporters, FCC officials did not say if the results of the survey could lead to more regulation or industry best practices but they have started talking to industry trade groups about ways to inform consumers about charges and fees.
Joel Gurin, head of the FCC’s consumer and governmental affairs bureau, said: “We consider it a very valuable guide.” The take-home message from the survey, he said, is that “people still don’t know what they should know.”
FCC officials said they will issue next week the results of a survey on consumers’ experience with broadband service.
Steve Largent, head of the CTIA wireless industry trade group, said he is very troubled with the current direction the FCC is taking after the mobile competition report last week and Wednesday’s mobile survey.
“It seems the commission is going to attempt to micromanage what is an incredible array of choices for consumers,” he said.
Reporting by John Poirier, editing by Matthew Lewis