• by Mark Walsh  @markfwal, October 4, 2010

Promptly refunding customers for accidental charges is apparently a foreign concept to Verizon Wireless. The nation's largest carrier said Sunday it would pay up to $90 million to about 15 million subscribers who were incorrectly billed for accessing data services they didn't use.

Verizon explained it "discovered" that over the past several years customers without data plans were charged for "data sessions on their phones that they did not initiate." Most will get refunds of $2 to $6.

Attention was drawn to the issue especially after the Federal Communication Commission asked Verizon about complaints arising over the $1.99 charges non-data customers were hit with when they accidentally accessed the Web on their handsets.

In responding to the FCC's enquiry late last year, Verizon appeared to split hairs, noting the incorrect charges only applied when a customer navigates away from the launch page. The carrier also said most phones include a feature allowing users to lock their screens to prevent accidental browser launches. It also said it had credited the $1.99 to customers who had complained about minimal accidental data use.

But Verizon has clearly been dragging its feet in dealing with a problem that's affected a large number of subscribers, many of whom may not even have noticed the $1.99 charge incurred for hitting the wrong button on their handset.

"We're gratified to see Verizon agree to finally repay its customers. But questions remain as to why it took Verizon two years to reimburse its customers and why greater disclosure and other corrective actions did not come much, much sooner," Michele Ellison, chief of the FCC enforcement bureau, said in a statement sent to The Wall Street Journal.

Accordingly, the FCC will continue investigating the matter and may impose penalties. The question is, why does it take the FCC to pressure Verizon to doing right by its customers? Why couldn't it take the step of issuing the broad refund for billing on inadvertent data use early on in response to the complaints from subscribers?

Verizon and others in the telecom companies often call for self-regulation when it comes to the prospect of new legislation or rule-making that will have an impact on the industry. But in this case, Verizon hasn't shown a willingness to move quickly, or at all, to address the widespread billing error until government intervened. It simply looks arrogant and indifferent in its dilatory handling of the problem.

A Consumer Reportsblog post Monday about the Verizon refund noted, "Even companies that seemingly get customer service right most of the time can mess up in spectacular fashion once in a while." It pointed out the carrier has a strong track record for customer satisfaction in its annual survey on cell phone service.

But the FCC in the last year has also asked Verizon about doubling its early-termination fees on smartphones to $350, eventually leading the company to reduce the number of models subject to the higher fee.

In its statement released yesterday, Verizon said it had addressed issues to avoid unintended data charges in the future. The company added, "When we identify errors, we remedy them as quickly as possible. Our goal is to maintain our customers' trust and ensure they receive the best experience possible." Time for Verizon to start living up to that credo.