After surveying customers and speaking with consumer protection and industry groups, something called the U.S. General Accountability Office has come to a total no-sh** conclusion: Customers are confused and frustrated with their wireless bills and contracts, and they need help dealing with their wireless providers.
Some details from the 66-page report, which was released Thursday and is based on surveys and interviews in 2008 and early 2009:
Billing. We estimate that during this time about 34 percent of wireless phone users responsible for paying for their service received unexpected charges and about 31 percent had difficulty understanding their bill at least some of the time. Also during this time, almost one-third of wireless users who contacted customer service about a problem did so because of problems related to billing.
Service contract terms. Among wireless users who wanted to switch carriers during this time but did not do so, we estimate that 42 percent did not switch because they did not want to pay an early termination fee.
Customer service. Among those users who contacted customer service, we estimate that 21 percent were very or somewhat dissatisfied with how the carrier handled the problem.
Still, the wireless companies get to say that, based on the GAO’s survey, 84% of consumers are either very or somewhat satisfied with their service. That sounds like a large figure. But when you look closer at the numbers, including the ones above—about one-third see unexpected charges on their bills and/or regularly can’t make sense of their bills at all—it’s clear that a large portion of folks aren’t happy. Even the “satisfied” percentage itself is a little misleading: 45% said they were “very satisfied,” while 39% said were “somewhat satisfied.” Somewhat satisfied? That’s hardly an endorsement. Many people are “somewhat satisfied” simply when they punch in a number and they’re able to complete the call without being disconnected. I’m “somewhat satisfied” when I turn the ignition and my car actually starts. About 10% of those surveyed, meanwhile, say they are very or somewhat dissatisfied.
The early-termination fees, or ETFs, are among the most hated features in wireless contracts. The GAO report says that over the past few years, wireless providers have been addressing the issue, specifically by prorating the fee, so that customers are hit with a smaller fee the longer they’ve been a customer. But should the FCC get involved to limit the amount of an ETF, or restrict it in any way? “Industry representatives,” the report states, “told us that the voluntary approach is more effective than regulation, since it gives the industry flexibility to address these concerns.”
Wow, that’s some serious spin there. Verizon just demonstrated its “flexibility” by introducing a highest-ever $350 ETF, and it’s not even prorated. You cancel anytime before the contract runs out, and you’re hit with a $350 charge. Period.
The point of the GAO report was to find out what, if anything, is wrong, and what, if anything, the FCC should be doing about it. Based on the report’s findings, however, it’s not clear that the FCC is capable of getting much in the way of results.
The FCC receives 20,000 to 35,000 complaints per year regarding wireless services. The complaints come, presumably, after customers have already gone through everyone there is to go through in their wireless provider’s customer service department, and they’re still unhappy. The FCC reviews each complaint, and if it determines the complaint is valid, contacts the wireless company, which is obligated to respond within 30 days. In 2008, the amounts of time needed to address each customer complaint and be able to officially “close” the complaint are as follows:
9% less than 30 days
52% require 30 to 90 days
27% require 90 to 180 days
5% more than 180 days
7% not closed
Beyond the sluggishness of the response time (and that there’s no way of determining a customer was happy even after the complaint was officially “closed”), there’s the fact that many people who want to complain have no idea where to complain in the first place. More than one-third (34%) of those surveyed said that they hadn’t a clue who to contact with complaints. From the report:
Therefore, many consumers that experience problems with their wireless phone service may not know to contact FCC for assistance or may not know at all whom they could contact for help.
So there’s probably a large number of people who want to complain but don’t know how or where to do so, and there’s probably an even bigger number of people who would complain and know where to complain, but who don’t bother because of all the time and frustration. The FCC says it receives 35,000 complaints a year, which sounds like a lot. But it’s tiny compared to the number of people who could be complaining if only they knew how, and if they thought it would do them any good.
Anyway, here are the official recommendations from the GAO report:
To improve wireless phone service oversight, FCC should improve its outreach to consumers about its complaint process, related performance goals and measures, and monitoring of complaints. To improve coordination with states in providing oversight, FCC should develop guidance on federal and state oversight roles, seeking statutory authority from Congress if needed, and develop policies for communicating with states. FCC agreed with the recommendation on monitoring, took no position on the remaining ones, and noted actions that begin to address most of the recommendations.
So everybody relax: The FCC is on the case.
Related:
The People Vs. Cell-Phone Tyranny: A Case for Lower Monthly Bills