“Bill Shock”—those unexpected and often-quite-large charges that suddenly pop up on cell phone bills – are consistently one of the top complaints from consumers about their wireless carrier.

That’s changing, however.

Spurred by aggressive lobbying from Consumers Union and other public interest groups – including petitions signed more than 62,000 CU activists – wireless companies agreed this week to adopt voluntary standards aimed at preventing Bill Shock.

Specifically, CTIA, The Wireless Association, and the Federal Communications Commission agreed to a new code of conduct for participating wireless carriers that will implement and/or standardize the use of free alerts for consumers when they are approaching or exceeding their monthly limits on voice, data and text. 

There’s no question Bill Shock is a huge problem. A May 2011 survey by Consumer Reports found approximately one in five respondents had received a cell phone bill that was significantly higher than they had expected in the past 12 months. Among those who experienced “bill shock,” more than half said the bill was less than $30 higher than expected, while 38% said the bill was $30 or more than expected.

This voluntary agreement is a big step in the right direction.  But because this agreement doesn’t carry the weight of law, Consumers Union will be watching like a hawk to see that wireless carriers carry through on their promises. If they don’t, we will push the FCC to make the rules mandatory rather than voluntary.

The four notifications agreed to under the deal include overage alerts before consumers reach monthly caps on their data, voice and text usage, as well alerts when a customer is about to incur a large fee for roaming. The participating carriers have agreed to provide customers with at least two of the notification categories by October 17, 2012, and all of the alerts by April 17, 2013.   We wish it would happen sooner.

We think it’s possible – and consumers deserve – to begin receiving free alerts now to avoid overage charges, and Consumers Union will be asking the carriers to move more quickly.  Some companies are already offering these alerts. It is especially important to provide these tools now, because many consumers cannot afford these unexpected charges in this tough economy.