Regulators Aim to Take ‘Surprise’ Out of Phone Bills
Stung by soaring complaints about confusing phone bills and unauthorized charges, federal and state regulators said Monday they are developing tough new requirements for clear and accurate phone bills.
The proposed consumer protection rules, nicknamed by some the “no surprises” initiative, are a work in progress being hammered out by officials from 11 states. They already have won strong support from the Federal Communications Commission.
“We get many, many thousands of complaints every year from consumers who feel that they are being taken advantage of in the [phone service] marketplace,” said FCC Chairman William Kennard, who was in Los Angeles on Monday for a meeting of the National Assn. of Regulatory Commissioners, an organization made up of state regulators and staff members. “We have to put the industry on notice that at the state and federal level we’re very, very concerned. . . . We’re launching an offensive.”
The first step in that offensive came from Kennard, who pushed through a new “truth-in-billing” initiative at the FCC that he says “directs phone companies to disclose--truthfully--what charges they’re asking consumers to pay for.” Now NARUC has drafted a series of more rigid rules that it expects many states to adopt through their respective utilities commissions or state legislatures.
The proposed new rules would help phone customers by requiring phone companies to send bills according to a certain minimum cycle (instead of sporadically, as some companies do); provide rate change information in a timely manner and in clear language; give customers the ability to “block” added charges on their phone bills; give customers a specified time frame to revoke the purchases of certain services before the billing starts; and provide bills that clearly show a customer’s billing status and any inaccuracies.
In addition, the guidelines would require phone companies to clearly identify which charges must be paid to avoid disconnection of local phone service and would create a way for state regulators to better track billing agents and other third-party companies that often place charges on phone bills on behalf of phone companies.
Though the rules are not binding, recommendations made by the group are influential and often spur formal regulatory action. NARUC played a key role in the FCC’s adoption in 1998 of more stringent regulations against “slamming,” the illegal practice of switching a customer’s long-distance carrier without permission, for example.
In California, Public Utilities Commissioner Carl Wood has pledged to bring state consumers a “Telephone Customers’ Bill of Rights” and is holding hearings throughout the state--including one in Santa Monica on Thursday--to hear ideas and complaints from phone customers. More than 200 people have spoken at the hearings so far.
Wood said the California PUC will probably use the NARUC proposals as a blueprint, as intended, for the state’s own requirements. But, he added, “We are going to have the strongest set of [consumer protection] rules in the country.”
Consumer advocates say the initiative is another in a string of recent cooperative efforts between the federal and state governments aimed at eliminating jurisdictional squabbles and producing real results for phone customers.
The action comes as customer complaints skyrocket at both the FCC and the various state regulatory agencies. An informal survey by state officials showed that complaints about AT&T; are on pace to jump 208% from 1997 to 2000 (up 211% in California) and complaints about WorldCom/MCI will finish the year up about 89% from 1997 levels (up 88% in California).
Though many of the complaints are about slamming, a large number of them involve confusing or inaccurate bills.
Many local phone companies also are triggering billing complaints. California regulators, for example, are considering a record $44-million penalty against Pacific Bell for allegations of misleading customers to book more sales.
