Ofcom UK Reveals Action Plan to Tackle Mobile Data and Voice BILL SHOCKS

The communications regulator, Ofcom UK, has threatened to impose stiff new rules on the industry unless Mobile Network Operators (MNO) act to “sufficiently reduce consumer harm” from Bill Shocks, which can occur when a customer exceeds their Mobile Broadband data and or voice allowances.

The warning came as Ofcom revealed the results from its “extensive review” into the causes of bill shocks, which found that 1.4 million mobile phone customers (i.e. those on a contract) “may” have been hit by an unexpected bill shock over the past 6 months.

The Main Causes of Bill Shocks (Ofcom’s Review)

* Downloading data, primarily while travelling outside the EU, but also when using data in the UK (for example, customers using smartphones which may download data without the customer realising, or not realising how much data they are using).

* Using mobile voice services in the UK, mainly by exceeding inclusive allowances or calling numbers outside of allowances.

* Lost or stolen phones – where the number of consumers affected is low, but the level of financial harm can be substantial.

* Low low levels of consumer awareness, such as finding it difficult to locate information about data charges from their provider and not knowing how to protect themselves in the first place.

The EU has already introduced a number of new measures to help prevent “bill shocks” (EU Roaming Regulation), including lower wholesale data prices and usage caps/warnings, and an updated set of rules has been proposed that would make related services significantly cheaper (here). The final plan has yet to be agreed but it will need to arrive before the old rules expire in July 2012.

Ofcom’s Action Plan ultimately supports EU regulators in calling for the above measures to be applied worldwide. Even if the newly proposed rules didn’t make it through then Ofcom has pledged to “consider whether to consult on intervening to protect consumers“.

But Ofcom doesn’t want UK mobile operators to wait and see what happens and has called upon them to “voluntarily introduce” financial caps and alerts prior to any new legislation taking effect.

Ofcom’s Additional Suggestions to Mobile Operators

* They should do more to develop and promote ‘opt-in’ measures, such as tariffs that allow consumers to set their own financial caps or receive alerts about usage.

* They should explore the feasibility of limiting the amount consumers would be liable for if their phone was stolen.

* They should offer better advertising of steps that consumers can take to protect themselves, such as locking their handsets.

* They should improve tariff transparency so that customers know what they’re getting.

The regulator has promised to keep a close eye on mobiles operators and will also be testing their compliance with existing rules, such as those that pledge to stop mobile data mis-selling. But for the most part Ofcom is merely following Europe’s lead. To get things rolling they’ve also published a new guide for consumers, which should help them tackle some of the above problems.