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Ofcom to tackle mobile phone 'bill shock'

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Young Woman Talking on Phone and Using Laptop in Car

© Rex Features / West Coast Surfer / Mood Board

Ofcom has today announced plans to tackle "unexpectedly high" mobile phone bills after research revealed that 1.4m contract customers have been affected by "bill shock" over the past six months.

The media regulator has warned the mobile industry that if action is not taken to address the issue of surprise high bills, then it will "consider mandatory options to tackle the problem".

Providers such Vodafone and O2 are being urged to do more to educate customers about how to avoid "bill shock", and Ofcom has now published a guide on its website on how consumers can protect themselves.

Ofcom's review of mobile billing revealed that downloading data outside of the UK was a key issue, particularly for anyone travelling outside of the European Union. It said that customers can be particularly stung after downloading data on their smartphones without actually realising it.

Other issues included customers exceeding their inclusive allowances for mobile voice calls, or calling numbers outside of their allowances, while Ofcom found problems affecting the high bills racked up on lost and stolen phones. The latter issue affects low numbers of customers, said Ofcom, but the level of financial harm can be "substantial".

EU Roaming Regulation currently requires mobile operators to apply a cut-off limit once a consumer's mobile internet bill reaches 50 Euros (around £42) per month while travelling in the European Union. They must also send alerts to consumers when they reach 80% and 100% of their limit.

Ofcom is supporting the EU regulatory group BEREC's proposals to extend this measure so that European consumers enjoy the same protection worldwide.

The EU is due to decide on the new rules before the summer, with a view to bringing these into force in July 2012, but Ofcom wants UK mobile operators to voluntarily introduce worldwide financial caps and alerts before that date.

Should the EU opt against introducing an extension of the existing protection and providers fail to act voluntarily, Ofcom said that it will consider whether to consult on intervening to protect consumers.

BEREC has also announced today that it expects wholesale data roaming costs to drop significantly by 2014, to under 5 eurocents per MB of data from the current rate of around 25 eurocents.

The retail charge of 1MB of data is currently around 1 euro, but Ofcom hopes that the cut in wholesale costs will enable customers to download more data when abroad before reaching the 50 Euro limit.

Elsewhere in its action plan, Ofcom has encouraged mobile providers to start allowing consumers to voluntarily set financial caps on their usage of data and voice, and get alerts when they are about to exceed their limits.

The watchdog also wants the firms to be more transparent with their data charges, and do more to monitor unusual usage and potentially fraudulent activity on lost and stolen phones, similar to the way banks do with customer accounts.

Currently, if a phone is stolen and the thief runs up a high bill, the device's owner is liable for the full amount, potentially running into thousands of pounds.

Responding to the action plan, Communications Consumer Panel chairman Bob Warner called for a co-ordinated response to the problem of "bill shock" to be implemented.

"As well as the immediate financial impact of unexpected costs, there is also a risk that people become overly cautious of using their phones for data in case they incur extra charges, so aren't benefiting fully from the opportunities that are available," he said.

Warner added: "In line with the positive recommendations and consumer awareness guide from Ofcom, we would like to see industry develop better information and mechanisms to give consumers control over their spending and alert them when they are likely to incur additional costs.

"We also want providers to use the information held about typical usage profiles to intervene earlier if a phone is lost or stolen to help to protect people from charges for unauthorised use."

> Ofcom to ban rollover broadband, landline contracts
> TalkTalk tops Ofcom's complaints list for 2011

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