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 Friday, May 28, 2010

Around 30 million Americans or one in six mobile users have experienced “bill shock,” a sudden increase in their monthly bill that is not caused by a change in service plan, according to the Federal Communications Commission’s survey of consumers, conducted by Abt/SRBI and Princeton Survey Research Associates, International. The survey also shows that nearly half of mobile phone users who have plans with early termination fees and almost two-thirds of home broadband users with ETFs do not know the amount of the fees they are accountable for. The survey notes that 83 percent of adults in this country have a mobile phone, and 80 percent have a personal mobile phone. The survey finds that of the 30 million Americans who have experienced bill shock 84 percent said their mobile carrier did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads. About 88 percent said their carrier did not contact them after their bill suddenly increased. The amount of bill shock varies widely but is often sizeable. In the survey, more than a third of people who experienced bill shock said their bills jumped by at least USD 50, and 23 percent said the increase was USD 100 or more. Of the respondents with personal mobile phones, 54 percent said they would have to pay an ETF should they terminate their contracts before the expiration date, and 18 percent did not know whether they would have to pay or not. Of those who are subject to an ETF, 43 percent said it was USD 150 or more, but 47 percent didn’t know how much it was. One reason for the confusion is billing practices, where only 36 percent of customers who are familiar with their bills said that they include “very clear” information on ETFs.

Only 21 percent of home broadband users say that their contracts include an early termination fee. Of those consumers, however, fully 64 percent do not know what the fee is, a higher level of confusion than for mobile phone service. The survey shows that ETFs are one factor that can keep customers from switching carriers even when their service is not ideal. Forty-three percent of these customers said ETFs were a major reason they would stay with their current service, almost exactly the same number who said they would be deterred from switching by the cost of setting up a new service or by paying a deposit on a new service.

Source: Telecom Paper