Ofcom could impose measures to protect consumers from unexpectedly high phone bills, if operators do not move to educate consumers about so-called 'bill shock'.
The regulator said it is working on an action plan with the industry to introduce measures to help consumers that have been hit with high bills. The most common cases of bill shock are through exceeding tariffs, downloading data or having their phones stolen. The regulator said consumers have low levels of awareness about how to protect themselves from high bills.
It said operators should do more to help customers avoid bill shock and warned: 'If these [measures] do not sufficiently reduce consumer harm, Ofcom may consider mandatory options to tackle the problem.'
Ofcom is encouraging operators to develop so-called 'opt-in' measures, allowing consumers to set their own financial caps or receive alerts about usage. It is planning further research into how appropriate these measures would be.
The regulator said while the range of tariffs offer 'choice and flexibility', consumers have found difficulty in finding information about data charges. It added '[Some consumers] were given insufficient or incorrect information by the providers.' It reiterated calls for operators to be more transparent about their tariffs.
It also encouraged a cap on the amount of money that can be racked up on a stolen mobile phone by a thief. Currently, if a huge bill is run up, the consumer may be liable for the full amount.
It also called for UK mobile providers to introduce a worldwide financial cap to avoid customers being hit with high roaming charges. Earlier this week, the European Parliament proposed cutting the price of making calls and texts abroad, as well as capping data roaming charges. The current roaming regulation requires all operators to apply a cut off limit once a buill reaches Eu50 (£42).
Ofcom said it supported proposals by the EU regulator Berec to roll out this protection worldwide. It said: 'If the EU decides not to extend the existing protection, and if all providers do not agree to introduce financial caps and alerts voluntarily, Ofcom will consider whether to consult on intervening to protect consumers.'
Bob Warner, chair of the Communications Consumer Panel, said: '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 benefitting fully from the opportunities that are available.' He added the panel has concerns about the cost of dialling freephone services from mobiles.
Ernest Doku, from price comparison site uSwitch, welcomed the Ofcom action plan. He said: 'The idea of implementing financial caps which consumers can 'opt-into' also makes a lot of sense. Many consumers do fall into the habit of over-spending on mobile phones, the ability to place a cap on their monthly spend is a way for users to regain control and hopefully avoid being hit with unexpectedly high bills.'
Editor: Graeme Neill