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Goodbye to cell phone bill shock

An Indian officegoer checks a text message on his mobile phone in Mumbai on Sept. 27, 2011.

Kai Ryssdal: According to the FCC, one out of every six cell phone users in this country has experienced what it calls "bill shock." That moment when you open your wireless bill and it's more -- sometimes way more -- than you thought it was going to be because you've gone over your limits.

So today, under no small amount of consumer and regulatory pressure, mobile companies rolled out some new voluntary guidelines to help avoid that. It's a way, they figure, to defuse consumer anger. And a nifty marketing opportunity, as well.

Marketplace's Nancy Marshall Genzer explains.


Nancy Marshall Genzer: Verizon, AT&T and other cell phone companies are promising to send text alerts when you approach the limits of your voice, text or data plan. Parents everywhere are weeping with joy.

Including Mike Jude, the father of a 20-something he calls a "power user."

Mike Jude: Yeah, it's like getting text from her that say, "yo" or yes or a happy face. Yeah, you go through a lot of texts that way.

At 20 cents a pop, that can really add up. Roaming charges can add hundreds to a bill. It just so happens Jude is a senior telecommunications analyst at the consulting firm Frost and Sullivan. He says carriers will probably use these alerts to market new services, like making it easy to switch to unlimited texting.

Chris Guttman-McCabe is with CTIA, the wireless trade group. His 11-year-old daughter is already signed up for unlimited texting.

Chris Guttman-McCabe: I have seen already notifications that say, 'If you want to add additional data you can push x or y, you can call customer service.'

Cell companies are making this voluntary move so the Federal Communications Commission doesn't do it for them. Mark Cooper is with the Consumer Federation of America. It's urging consumers to complain if carriers turn the alerts into a nonstop marketing campaign.

Mark Cooper: And it will be discovered that they're trying to sell people more services rather than just alert them to the increase in the bill.

The FCC already has formal rules ready in the wings, just in case the voluntary alert system doesn't work.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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