Bill Shock: Read Your Service Contract's Fine Print

They say the world is divided into two types: those who read the small print and those who don’t. I’m not sure this is true – I don’t think I know anybody who has actually read the small print of their service contract when they picked up a new smartphone or netbook. First off (and I am including myself here), you’re always way too excited about trying out the new device to be bothered to read all the legalese. Secondly, even if you do try wading through it, it is often far too dense for a regular consumer to understand.

And it’s not just the small print that’s baffling for most consumers. Most people simply have no idea how much data they are consuming or whether updating their Facebook profile is more data intensive than searching Google. Nor do they have any intuitive understanding of what a 5GB fair usage policy actually means, leading to an unpleasant shock when they receive a huge bill for exceeding this limit.

This lack of knowledge of actual usage is a worldwide problem. In Europe, the regulator has become involved because of the problem of high roaming costs from one EU country to another. This is best highlighted by the case of the German tourist who downloaded a TV program while roaming in France and later received a €46,000 bill. In response, the European Commission has introduced new rules to protect consumers from "bill shock" by introducing a cut-off mechanism for roaming charges once the bill reaches €50, unless they choose another cut-off limit. Operators have until March to put this cut-off limit in place.

But rather than wait for the regulator to get involved or face unflattering articles about consumers unwittingly running up huge bills, service providers would be better off pro-actively addressing this problem by monitoring consumer usage in real time and notifying their customers when they are approaching the limit, advising them to either reduce data consumption or purchase an additional data allowance. Customers, whether they are pre- or postpaid, want real-time notification of their allowance status and current tariff.

It’s not only customers who will benefit by real-time services to support their postpaid contracts. Service providers can also leverage real-time capabilities for postpaid to increase share of wallet. This can be done by allowing real-time benefits qualification and enabling the immediacy of promotions. For example, a user can receive 20 free text messages once their usage exceeds $25. The benefit is provided in real-time eliminating the need to wait for the monthly bill cycle.

As service providers prepare for the connected world, where a trillion devices will be connected to the network, it’s vitally important that consumers have the confidence in their service providers to experience new and exciting services and not be scared they’re going to be hit down the road with a huge bill for having unknowingly exceeded their data package.

Mike Couture is vice president of Amdocs, where he leads the company’s global team of marketing professionals in the areas of market research and insight, product marketing, marketing communications, corporate marketing, regional marketing and account-based marketing.