Over the partial dissent of Commissioner Mike O’Rielly, the FCC today responded to a petition from litigants involved in a billing dispute by declaring that “vague charge descriptions on a bill may violate” the agency’s truth-in-billing rules and the Communications Act.
In 2010, the U.S. District Court for the Eastern District of Michigan found that the FCC has not ruled on whether a violation of the truth-in-billing requirement that charges on phone bills be “accompanied by a brief, clear, non-misleading, plain language description of the service or services rendered” is “unreasonable” for the purposes of section 201(b) of the Act, which prohibits unjust and unreasonable practices by telecommunications carriers.
Consumer plaintiffs Gregory Manasher and Frida Sirota and defendant NECC Telecom submitted a petition to the FCC with the eight questions referred by the court, and the agency sought comment on the petition in 2012.
In a declaratory ruling adopted Tuesday and released today in Consumer and Governmental Affairs docket 98-170, the FCC said that “that billing information that is unclear, rather than misleading or deceptive, under Section 64.2401(b) also violates Section 201(b).”
It added, “We clarify that listing charges on a bill with no accompanying description violates Section 64.2401(b) and thus Section 201(b), except where context and the mere name of the charge makes its nature so obvious to the consumer that no description is necessary.”
“We find that a charge labeled ‘recurring fee’ without additional description or clarifying context violates the rules and Section 201(b), even if non-misleading,” it said. It reiterated that a charge carrying such a label when the charge is for receiving a special rate would violate the truth-in-billing rules and section 201(b). Similarly, it found that a charge labeled “other fees” without additional explanation or clarifying context would also violate the rules and section 201(b).
In these cases, it emphasized, “the context of such a charge would inform our analysis.
However, it found that “a 1.5% charge labelled ‘late fee’ that lacks any additional description does not violate Section 64.2401(b) or Section 201(b). ‘Late fee’ is sufficiently clear and non-misleading that it does not require additional description.”
“By contrast,” the FCC said, “we find that a $4.99 charge labelled ‘recurring fee’ that is imposed ‘for being late’ without additional explanation or clarifying context is inherently misleading and unclear and thus violates the Truth-in-Billing rules and thus Section 201(b).”
It said, “The Truth-in-Billing rules focus on the format and clarity of a consumer bill, and do not reach the actual bill charge. Thus, charging and collecting a late fee without refunding the late fee after discovery of the error does not violate the Truth-in-Billing rules.”
The court had also asked whether charging a total that exceeded the actual total of the individual listed charges would violate the rules and whether, if only unclear, it would violate section 201(b).
The FCC responded that “incorrect tallying of monthly charges so that the billed amount is greater than the individual charges does not violate our Truth-in-Billing rules, which focus on bill format and clarity. While such a bill might be confusing because of calculation discrepancies, the customer would be in a position to read the bill and obtain clarification of the error from the carrier, and thereby to have been provided enough information so as to reasonably identify and understand the service being charged.”
With respect to both the question of failure to refund a mistaken late fee and the incorrect tallying of the total, the FCC said, “We have not been asked, and do not determine, whether or when such a practice may violate any other Commission rule or provision of the Act.”
The Commission “emphasize[d] that a final determination will require the court to apply our ruling to the facts at issue in the case.”
In his separate statement approving in part and dissenting in part, Commissioner O’Rielly said, “I am concerned that the Declaratory Ruling, issued on the basis of a 2006 court challenge and a record that concluded in 2012, could now be read to limit the scope of intentional truth-in-billing discretion. As the item acknowledges, commenters emphasized the need to retain carrier discretion and noted that charges that might appear to lack context on the face of the bill may actually be clear when read in conjunction with the other materials, including the contract or other information provided apart from the bill itself. Therefore, I disagree with the portions of this item that suggest that clarifying information must be contained on the bill itself. These same commenters also expressed concerns, which I see some merit in, about broadly answering questions about billing practices that are, by their very nature, fact-specific.
“I am also troubled that we take this action, which understandably only applies to traditional common carrier voice providers, against the backdrop of a flourishing voice market. If consumers are unhappy with the level of detail contained on their traditional voice telephone bills, the market has responded by providing a number of other options to choose from, many of which offer advanced technological capabilities. In the presence of this reality this item should strike a more careful balance. Instead, its effort to explicitly or implicitly constrain billing practices could make compliance more burdensome for providers of legacy services or confuse consumers with more billing detail than helpful,” he added. —Lynn Stanton, [email protected]
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