UK Regulator Launches ‘Bill Shock’ Consultation

‘Bill shock’ is the phenomenon of customers receiving bills that are far higher than they are used to. The high charges may stem from roaming, or using data services, or both. Pundits like Tony Poulos have campaigned hard for the telecoms industry to be more active in countering bill shock. As he argues, telcos need to weigh up the worth of one big bill payment versus a lifetime of customer distrust. Now it seems the voices of reason within the industry are being joined by the men who carry big sticks – the regulators. The UK’s communications regulator, Ofcom, has just issued its own consultation on bill shock. Unlike most consultations, which focus on getting responses from industry, Ofcom is reaching out to consumers and asking about their bill shock experiences. Expect the published responses to provide a library of horror stories that may haunt telcos for years to come. In the consultation, Ofcom describes the findings of their own market research:

To help determine the magnitude of the issue of unexpectedly high bills, as well as to understand possible causal factors, Ofcom commissioned an omnibus research survey in November 2010 among 2000 GB adults aged 16+. Respondents were asked whether they had received an unexpectedly large bill for mobile phone, landline phone, fixed-line broadband and/or mobile broadband services in the last 12 months. Of this sample, 6% had experienced bill shock in relation to their mobile phones; 5% in relation to their landline; 3% in relation to their fixed-line broadband; and less than 1% in relation to mobile broadband.

Of those with mobile bill shock, 18% reported their bill was more than GBP100 (USD164) greater than expected. Ofcom goes on to note:

Ofcom is mindful of the fact that unexpectedly high bills can cause significant harm for those few consumers who experience it and the risk of bill shock might affect the behaviour of many, perhaps even the majority, of consumers.

Regulation to protect customers tends to follow a predictable pattern: telcos get themselves into bother, customers get upset, the regulator eventually realizes and is forced to act. The cost of regulation is unpredictable, but there is one thing you can be confident of: it is cheaper and better to put your own house in order, without waiting to be told how to do it. Bad news is bad for business. The need to end bill shock has to rise up the agenda, whether telcos see commercial sense, or are forced to act by a regulator.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.