FCC Reaches Record-Breaking Settlement with Verizon over Mystery Fees

Verizon Wireless reached a record-breaking settlement with the Federal Communication Commission over "mystery fees" charged to its cell phone customers.

Verizon agreed to make a $25 million payment to the U.S. Treasury, and to promptly refund a minimum of $52.8 million to about 15 million customers.

The payment is the largest in FCC history.

The agency’s Enforcement Bureau began investigating Verizon Wireless in January 2010, prompted by consumer complaints and press reports about unexplained data charges. Most of the charges were small—in the $2 to $6 range—and involved “pay-as-you-go” data fees for customers who did not subscribe to a data package or plan.

For example, customers were charged for unauthorized data transfers initiated automatically by applications (like games) built into certain phones, or for accessing certain web links that were designated as free-of-charge, like Verizon’s home page.

“People shouldn’t find mystery fees when they open their phone bills -- and they certainly shouldn’t have to pay for services they didn’t want and didn’t use,” said FCC chairman Julius Genachowski in a statement. “In these rough economic times, every $1.99 counts.”

Verizon in a statement stressed that the problem was “discovered through our own investigation in response to customer inquiries” and that “We have taken this action because it is the right thing to do.” The company also said that by far the single largest problem was caused by “a very small data ‘acknowledgment’ session sent by software pre-loaded on certain phones.”

A Verizon spokesperson said the company is not disclosing the names of the lawyers who worked on the settlement. In the past, the company has turned to Wiley Rein partner Andrew McBride for FCC matters and other litigation. McBride did not return a call seeking comment.

The consent decree was signed by Verizon deputy general counsel John Scott III and FCC Enforcement Bureau chief P. Michele Ellison.

“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,” Ellison said in a statement. “I am gratified by the cooperation of the Verizon Wireless team in the face of these issues, and pleased they are taking the high road.”

Comments

[michael roman]

I SUBMITTED MY CLAIM ONLINE AND BY MAIL I NEVER RECEIVED ANY KIND OF PAYMENT FROM THIS LAWFIRM YET BUT I ALWAYS THOUGHT VERIZON CHARGES TOO MUCH FOR THEIR SERVICE

[Lee Anderson]

I cashed my check Nov. 24; on Dec. 2 it bounced with the notation "unable to locate acct."

Verizon Settlement Fund
c/o Gilardi & Co. LLC
P.O. Box 719088
San Diego CA 92171

WTHeck???

[Darren Chaker]

It seems as the common theme in business: make what you can, while you can. Get caught, go back to the drawing board.
Darren Chaker

[Jeff]

Taking the high road...maybe. But only after forced off it by the highway patrol.

[smithered]

"Taking the high road" is a bit of a stretch! If you did that to a guy's face you'd get a punch in the nose. Those data charges have rooked me for years -- on a 39.95 plan I end up paying over $65 every month. When I call they eliminate the data charge.