FRIDAY, OCTOBER 8, 2010
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FCC heeds cellphone users’ complaints about ‘bill shock’ Newrulewouldmake
All told, he’s called Verizon’s
carrierswarn customers about overcharges
BY CECILIA KANG The Federal Communications
Commission wants cellphone customers to know: It can hear you now. Consumers are complaining
in record numbers about their wireless bills, and the FCC has promised to act. Next week, the agency will unveil a proposal to address “bill shock” by requiring that carriers notify users of over- charges and sudden increases in their bills. But advocacy groups say the
FCC has barely begun to address the massive problems generated by increasingly bewildering phone bills. As cellphones are “bundled”
with television and Internet ser- vices, and with the exploding number of applications available for smartphones, consumer groups say bills have become multi-page puzzles. They com- plain of confusing language, third-party charges,mystery fees for data and other services — all amounting to monthly totals that aren’t what a user signed up for at point of sale. The recent announcement
that Verizon Wireless wrongly charged 15million customers for data fees and will shell out $50 million in reimbursements doesn’t help public sentiment. “This is only one case that
made the light of day,” said Carl Hamann, a resident of Stamford, Mich.,who believes hewas one of those Verizon customers. He said he was charged $1.99
for data he never signed up for last January and February. He’s been charged for data each month over the past year, even though he’s only signed up to place and receive voice calls. Hamann said he put a block on his account so he and his 20- year-old son can’t use text and data services. Still, he got billed $73.65 for data in June and $68.25 in July.
customer service eachmonth for what he said was more than $300 in erroneous data services. “This may not be a lot for one
customer, but then look at all their customers affected and you do themath,” Hamann said. Verizon said itwould not com-
ment on a specific case. It also declined to comment on the FCC’s ongoing investigation into its billing practices. Small “mystery” charges are
among the most common errors on cellphone bills, according to Validas, a Texas-based company that audits telecom bills for cor- porations and individuals. Edward J. Finegold, Validas’s
chief analytics officer, said one growing problem involves third parties, such as a text-messaging service or ringtone provider, pig- gybacking onto someone’s phone bill. For example, a user may
EZ SU
Economy & Business A15
Breakdown of data on retail sales, job market reveals uneven picture
companies stuffmystery charges into bills. But the agency has struggled
to keep up with changes in technology and the rising tide of complaints. In the first quarter of 2010, the
FCC received 5,130 inquiries on wireless billing and other issues, an increase of 28 percent from the same period a year earlier. In a survey this year, the FCC found that 30 percent of users said they experienced “bill shock,” with sudden increases fromdata over- charges and other services that they found only when they re- ceived their bills. “Considering more and more
people are going to wireless only these days, it’s becoming a bigger and bigger problem and people feel like they are banging their heads up against a wall because they also feel like they rarely get their billing problems resolved,”
“Considering more and more people are going to wireless only these days, it’s becoming a bigger and bigger problem.” —Chris Morran, senior editor,
Consumerist.com
send a textmessage to an outside service through an offer in, say, a videogame, expecting a one-time charge. But Finegold said the fine print actually allows the service to automatically trigger a monthly subscription fee. “None of this is illegal, but
most people would expect that if you have a trusted relationship with your carrier, it would have strict standards on third parties who add charges to its bills. But that is not happening,” Finegold said. Once in a while, the billing
errors are extremely costly, Fine- gold said. He said his company discovered that one of its For- tune 500 customers was not getting a $133,000monthly cred- it that had been promised by its cellphone provider for signing up additional lines. The FCC already has rules
requiring truth-in-billing prac- tices and prohibiting the prac- tice known as cramming, when
said Chris Morran, senior editor at
Consumerist.com, a Web site owned by the nonprofit Consum- ers Union advocacy group. Trade group CTIA-The Wire-
less Association has warned against regulation or legislation of billing practices. It opposes proposed “bill shock” legislation, introduced by Sen. Tom Udall (D-N.M.), that would require cellphone carriers to notify cus- tomers by e-mail or textmessage — free of charge — when they have used 80 percent of their monthly limits. The group said customers
have many ways to track their minutes and data usage. And firing back at criticism of their own billing practices, CTIA said in a statement about Udall’s bill: “We are concerned that this bill has the potential to cause cus- tomer confusion and frustra- tion.”
kangc@washpost.com
BY YLAN Q. MUI AND NEIL IRWIN
The nation’s economic recov-
ery remained halting and uneven in September as momentum stalled in consumer spending and the labor market showed mixed signs of progress. Retailers on Thursday re-
leased monthly sales results that showed sharp improvement at high-end stores but only tepid growth amongmass discounters. Although industry sales rose overall, the pace of growth has slowed since the summer. Meanwhile, the Labor Depart-
ment said the number of new claims for unemployment insur- ance benefits fell to 445,000 last week, the lowest level since early July and down 11,000 from the previous week. Yet the govern- ment’s official tally of the labor market, slated for release Friday, is expected to show that the unemployment rate inched up- ward in September to 9.7 percent. And the stubborn job market is weighing on consumers. “Itmay be true in an economic
sense, in an academic sense, that the recession is over,” said Matt Shay, chief executive of the Na- tional Retail Federation, an in- dustry trade group. But “in the mind of many consumers, the recession is not over.” The International Council of
Shopping Centers, a trade group, reported Thursday that sales at stores open at least a year—a key measure of retail health — rose 2.6 percent in September com- pared with a year ago. Though analysts called the gain modest, it was less than the 3 percent jumps over the summer and was the smallest increase sinceMay. The figure is based on sales
data at about 30 national chain stores that reported results and was driven by strong perfor- mance among high-end retailers. Nordstrom posted a 7.5 percent gain in September compared with a year ago, while Saks Fifth Avenue’s sales grew 6.5 percent. Overall, the sector rose 6.6 per- cent, themost of any group. Department stores also report-
ed strong results, boosted in part by last-minute back-to-school
KEVORK DJANSEZIAN/GETTY IMAGES
Job seekers at a Los Angeles career fair.Numbers out Friday are expected to show the unemployment rate inched up to 9.7 percent.
6
on
washingtonpost.com Scenes of a downturn
The financial crisis of 2008 is having a broad and
deeply felt global impact. Go to
washingtonpost.com/photos.
shopping. Macy’s said its Sep- tember sales jumped 4.8 percent, calling the back-to-school season its strongest in years. “We believe this momentum
will work to our benefit as we approach the upcoming holiday season,” Macy’s chief executive Terry J. Lundgren said in a statement. But not all retailers were as
merry as Macy’s. Sales at dis- count stores inched up 1.2 per- cent in September, a sign that lower-income consumers still re- main distressed. Target said its 1.3 percent gain was at the low end of its expectations. And though behemoth retailer Wal- Mart does not report monthly results, it has said the “paycheck cycle” — in which sales spike when shoppers receive their pay- checks or government benefits— remains pronounced. In the job market, the contin-
ued decline in weekly unemploy- ment claims is positive news, representing a downward trend in the number of Americans on the jobless rolls. That number peaked at more than 500,000 in August before falling to 445,000
last week. The four-weekmoving average
of claims, which smooths out volatility, fell to 456,000 from 459,000. The number of continu- ing claims for benefits actually edged up by 5,000. But the September employ-
ment report to be released Friday should offer more definitive evi- dence of where things stand in the labor market. With the Cen- sus Bureau still eliminating tem- porary jobs from its once-a-dec- ade count, overall job growth is expected to be approximately zero. Growth in private-sector jobs, however, is expected to edge up, with 75,000 net new posi- tions an improvement from the 67,000 private jobs created in August. However, with overall job cre-
ation at a standstill and people returning to the labor force as the economy improves, forecasters expect the unemployment rate to rise from 9.6 percent to 9.7 percent anyway. The report has greater impli-
cations than normal for govern- ment policy. It is both the last employment report before the midterm elections and the last one before the Federal Reserve meets in early November to de- cide whether to take new mea- sures to try to boost economic growth.
muiy@washpost.com irwinn@washpost.com
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