"Mystery fees" solved, says the FCC. Verizon Wireless will pay the largest charge in FCC history, plus refund customers a minimum of $52.8 million.
"Mystery charges" levied by Verizon Wireless on the bills of
approximately 15 million customers over the last three years will cost the
carrier nearly $78 million. Concluding a 10-month investigation into the
matter, the Federal Communications Commission announced
Oct. 28 that Verizon will have to "immediately" refund customers a
minimum of $52.8 million, as well as make a record payment of $25 million to
the U.S. Treasury-the largest payment in the history of the FCC.
The investigation began after a number of consumers complained of being
charged fees for data they didn't use.
"Mystery solved: today's settlement with Verizon Wireless is about
making things right and putting consumers back in the driver's seat,"
Michele Ellison, chief of the FCC's Enforcement Bureau, said in a statement. "Today's
settlement requires Verizon Wireless to make meaningful business reforms,
prevent future overcharges, and provide consumers clear, easy-to-understand
information about their choices."
The FCC detailed seven "key consumer protection measures" that
Verizon will have to take. The first is to take steps to prevent the
unauthorized charges from happening again, which Verizon Deputy General Counsel
Mary Coyne, in an Oct. 3 statement originally
addressing the investigation
, said Verizon has already done.
Second, Verizon must repay the 15 million customers who were overcharged
with refunds or credits on their October or November bills. Third, the FCC
noted that Verizon's repayment obligations are not capped at $52.8 million, and
that customers who do not receive a refund but believe they're entitled to one
have a right to appeal, have their case reviewed and receive a resolution
within 30 days. And fourth, Verizon must offer "data blocks" to
anyone wanting to avoid data-related charges.
The overage charges were related to Verizon's pay-as-you-go plan, which
charges customers without a data plan $1.99 per megabyte they decide to use. In
the instances of the overages, the $1.99 was applied in instances where an
application initiated a data transfer, links were clicked that had been
designated as free, network coverage was insufficient to complete a requested
data transfer or unwanted transfers were initiated by third parties.
The fifth measure, then, requires Verizon to improve its customer service by
offering plain-language explanations of the "pay-as-you-go" data
charges and data plans as well as offer online billing tutorials for customers
and enhanced training for Verizon customer service representatives on the
Verizon must also create a Data Charge Task Force-the sixth measure-that's
staffed by specially trained customer service experts who will oversee data
charge-related issues and report regularly to the FCC.
And finally, Verizon must submit periodic reports to the FCC on its refund,
training and customer service initiatives.
"There is nothing more satisfying to the public spirit than to right a
wrong or rectify an injustice," Ellison said.
In July, the FCC launched a Consumer
Help Center Website
, where consumers can get information about
telecommunications issues, receive additional information before making
communications purchases, express opinions and file complaints.
"We salute the consumers who had the tenacity to call attention to this
problem," Ellison added. "We will continue to monitor the company's
compliance going forward. And, consumers, if you need us, our lights are
On Oct. 3, in advance of the FCC's findings, Verizon addressed the overage
issue, looking to avoid, The New York Times suggested, being charged with a
formal Notice of Apparent Liability. "When we identify errors, we remedy
them as quickly as possible," Verizon's Coyne said in the Oct 3 statement.
"Our goal is to maintain our customers' trust and ensure they receive the
best experience possible."
Ellison, in the FCC statement, commended the Verizon team for its
cooperation and for "taking the high road" in "the face of these
On Oct. 22, Verizon announced a 25 percent drop in profits during its fiscal
third quarter of 2010
, in part due to personnel issues surrounding layoffs.
The carrier added nearly a million wireless customers during the quarter, and
revenues came in at $26.5 billion, just ahead of Wall Street estimates.