Verizon Wireless announced last week that it will pay up to $90 million in refunds to 15 million cellphone customers who were wrongly charged for accidental Web access and data usage.
The customer refund — which is reportedly one of the largest in history by a telecommunications company — comes amidst settlement talks with the Federal Communications Commission after it launched an investigation in January into why so many Verizon customers were complaining of unauthorized charges. The voluntary refund was issued by Verizon in order to avoid formal enforcement by the FCC and likely litigation from class action attorneys.
The FCC began its investigation 10 months ago after hundreds of Verizon Wireless customers complained about being charged “mystery” fees over the past several years. The commission found that Verizon Wireless had overcharged customers by more than $50 million in the past two years.
The billing mistakes happened when customers without data plans were charged $1.99 for data exchanges initiated by software built into their phones, or because they accidentally went online by accessing Web links that should not have incurred charges. Even if customers immediately canceled the action, they were often charged the $1.99 Internet access fee. Customers who contacted Verizon about the charges were either refused their request to have the charges reversed or discouraged from blocking the data service on their phones.
Verizon said in its statement that customers who received the bogus charges would receive credits of $2 to $6 on their October or November bills. Former customers will be mailed refund checks. Some customers will receive larger credits or refunds, depending on how much they were overcharged.
“While I appreciate that Verizon Wireless has acknowledged its billing errors, the refunds to millions of Americans have been a long time coming. It appears the company was first notified, more than two years ago, about certain billing errors. As I pointed out in December of last year, the company’s initial response to public reports of the phantom fees was that it does not charge consumers for accidental launching of the web browser. [Last week’s] announcement clearly requires further explanation,” he said.
Even though Verizon Wireless’s refund was intended to stave off further investigation by the FCC, the agency will continue to look into why the company took so long to issue refunds and correct the problem.
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