Verizon's 'Mystery Fees' Payout Was a Sham, Says FCC Petition
Verizon's "mystery charges" problem may not be solved after all.
Verizon paid out $78 million in 2010, after the Federal Communications Commission (FCC) found that the carrier had wrongly added Internet connection fees of $1.99—"mystery fees," as they came to be known—to the statements of approximately 15 million customers over a stretch of three years.
Of that sum, $52.8 million went to customers, while $25 million was a "voluntary contribution" to the U.S. Treasury.
Now, a Washington, D.C., lawyer is saying Verizon got off easy. The amount Verizon collected through its false charges may be closer to $240 million.
Arthur V. Belendiuk filed a petition with the FCC July 2, The New York Times reported the same day. According to documents he obtained through a Freedom of Information Act (FOIA) request, Belendiuk says Verizon "vastly understated the amount it collected from false data charges on customer bills when it agreed to refund the levies in 2010," wrote the Times.
It added that in his petition, Belendiuk said that after Verizon fixed the flaw that was causing the $1.99 charges, Verizon's revenue dropped by approximately $8 million per month."
Multiply $8 million times 12 months in a year, for three years, and you're at $288 million. Minus the roughly $50 million mea culpa Verizon paid customers, and one is in the ballpark of $240 million.
Verizon isn't commenting on the petition, except to say that it's without merit.
Belendiuk's office released a July 2 statement saying that while the Verizon Consent Decree was the highest ever paid, the FCC's Enforcement Bureau didn't verify that Verizon's payment represented a full refund.
"The Enforcement Bureau conducted its investigation behind closed doors, withholding from the public its two letters of inquiry and numerous responses by Verizon Wireless," said the statement.
It went on to say that Verizon responded to a 2010 FOIA request with a document "so heavily redacted by Verizon Wireless as to be useless."
Belendiuk then filed a lawsuit under the FOIA with a Washington, D.C., court. The case was ultimately settled with Verizon and the FCC handing over the requested documents in March 2013.
"This two-and-a-half-year legal process is a vivid example of the FCC subjugating the public's right to know under the law to the interests of its largest regulated companies," said the statement.
"More importantly," it continued, "the disclosed documents reveal that Verizon Wireless was aware of the overcharges at the same time as it was denying the problem to complaining customers and it was representing under oath to the FCC that the data charges were legitimate and proper."
Announcing Oct. 28, 2010, that the matter had been settled, Michele Ellison, chief of the FCC's Enforcement Bureau, said in a statement: "Mystery solved: today's settlement with Verizon Wireless is about making things right and putting consumers back in the driver's seat."