Verizon Pays $77 Million To Settle 'Mystery' Fees
Verizon has agreed to pay a total of $77 million to settle complaints over so-called mystery fees charged to customers for mobile data services they didn't use. Under its consent decree with the Federal Communications Commission, Verizon will refund $52.8 million to 15 million customers incorrectly billed over the last several years and 25 million as a fine to the U.S. Treasury Department.
Under the agreement, the nation's largest carrier must stop charging erroneous fees and to take further steps to protect consumers, including setting up a task force to monitor and resolve data charge complaints and related issues. The task force will report regularly to the FCC.
The settlement is the largest ever in FCC history and ends its 10-month investigation into the overcharges typically incurred when Verizon's non-data customers accidentally launched the Web browsers on their handsets. That action automatically triggered an automatic $1.99 "pay as you go" fee. But Verizon could end up paying more than the $52.8 million if any subscribers who didn't get a refund, appeal and receive a favorable decision within 30 days.
Earlier this month, Verizon issued a statement saying it would provide credits of between $2 and $6 to the 15 million affected customers, which could have been as much as $90 million. In a statement Thursday, the carrier said the repayment process was already underway and that it agreed to the $25 million payment to the U.S. Treasury "even though the inaccurate billing was inadvertent."
The action against Verizon is part of the agency's wider "consumer empowerment agenda" that also includes addressing issues like "blll shock," when customers are hit with unexpectedly high monthly wireless bills. Earlier this month, the FCC proposed new rules requiring wireless operators to send customers a voice or text alert when they are about to exceed their monthly usage limits and incur additional fees.
Among other customer service initiatives that Verizon will adopt under the FCC agreement is to provide plain-language explanations of "pay as you go" data charges, creating an online tutorial to help consumers understand their bills, and provide enhanced training to Verizon customer service reps. Verizon will also submit periodic reports to the FCC on its refund, training, and customer service initiatives including information on specific complaints.
Verizon earlier this year had also run afoul of the FCC after it doubled its early-termination fee (ETF) to $350 for smartphone users. Under heightened scrutiny from the agency, the carrier removed some phone models from the category subject to the higher ETF.