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Verizon Wireless pays FCC $25M for years of false data charges


Photo: Julius Genachowski, chairman of the Federal Communications Commission
photo credit: UPI


The Federal Communications Commission said Thursday that it has reached a record $25 million settlement with Verizon Wireless over the company’s false charges of "mystery" Internet fees over the past several years.

The payment will go to the U.S. Treasury and is the largest settlement in FCC history. The settlement also ends the FCC's 10-month investigation into overcharges at Verizon Wireless, the agency said in a news release. An FCC spokeswoman declined to comment on whether the settlement also ends the agency's other billing inquiries.

With the action, Verizon Wireless's total costs associated with false data fees reached $77.8 million, one of the largest payouts for false billing in the communications services industry. Verizon said this month that it would refund about 15 million subscribers $52.8 million for those unwanted data charges. Verizon partly attributed the problem to a software glitch in phones.

"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," FCC Chairman Julius Genachowski said in a release. "In these rough economic times, every $1.99 counts."

Verizon Wireless said in a news release that its overcharges were "inadvertent."

“We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills,” the release said.

Genachowski said the large settlement was meant to send a signal to other communications services providers. In 2007, Univision paid the FCC a $24 million settlement for violating children's television programming rules.

And analysts say the FCC appears to be ramping up regulatory pressure on companies to protect consumers. It is exploring a proposal that requires that cellphone service provider send text and voice alerts to users as they approach monthly limits. Genachowski has indicated that he will look into regulatory fixes for the growing fines associated with breaking long-term service contracts.

"It will serve as a significant deterrent to others in the future," he said.

Verizon Wireless admitted that it had wrongly charged those subscribers a couple dollars for Internet overcharges and accidentally tripping their Web browsers. Many of those customers subscribed only to voice services and did not intend to use data services. They complained to the company and the FCC of mystery fees that appeared on their bills.

Verizon Wireless is the nation's largest wireless service provider with 90 million subscribers. The firm announced its refund amid an FCC investigation into data charges brought from complaints from consumers.

This month, the FCC began an exploration into regulations that would require cellphone service providers to alert users when they are close to going over their monthly allotted voice, text and data limits. In a survey, the agency said 30 million cellphone users said they experienced "bill shock," with extra charges on their monthly bills for data overcharges and other fees.

By Cecilia Kang  | October 28, 2010; 2:15 PM ET
Categories:  FCC, Verizon  
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Comments

Just like BC; never trust a Limey!

Posted by: JONWINDY | October 28, 2010 2:29 PM | Report abuse

so the consumer gets worked over by verisizon, which the governemtn got paid tax money on, and then the govenemtn reaches a settlement (where in Verizon admits no wrong doing) that the fines go to the government???

so the consumer gets it in the kyster 3 times for one bad bill....

That gets a rating of AWESOME!

Posted by: EnoughisEnough1 | October 28, 2010 2:29 PM | Report abuse

Comcast is doing the same with mystery fees.

In paying bills, I've noticed several "charges" that the fine print says are NOT taxes, but they call them "regulatory costs".

The FCC needs to crack down on this!

Posted by: WillSeattle | October 28, 2010 2:33 PM | Report abuse

(i should say I get my phone service from Comcast, as well as high-speed internet, not just cable TV)

Posted by: WillSeattle | October 28, 2010 2:34 PM | Report abuse

Comcast is doing the same with mystery fees.
In paying bills, I've noticed several "charges" that the fine print says are NOT taxes, but they call them "regulatory costs".
The FCC needs to crack down on this!
Posted by: WillSeattle
________________________________________
Thanks for the heads up, WillSeattle! Not that anyone really wants to ever try to contact anyone at Comcast, but just wondering if you might have and what their explanation was.

Posted by: seaduck2001 | October 28, 2010 2:39 PM | Report abuse

Posted by: WillSeattle | October 28, 2010 2:34 PM

Comcast is doing the same with mystery fees.
In paying bills, I've noticed several "charges" that the fine print says are NOT taxes, but they call them "regulatory costs".
The FCC needs to crack down on this!
Posted by: WillSeattle
________________________________________
Thanks for the heads up, WillSeattle! Not that anyone really wants to ever try to contact anyone at Comcast, but just wondering if you might have and what their explanation was.


Posted by: seaduck2001 | October 28, 2010

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Remember this is Comcast you are talking about. Read about 75 year old Mona Shaw and the hammer she needed to get Comcast to respond

http://www.washingtonpost.com/wp-dyn/content/article/2007/10/17/AR2007101702359.html


Posted by: DCObserver1 | October 28, 2010 2:45 PM | Report abuse

Do we get six (6) years of INTEREST with the refund you are going top give us?

Posted by: digtldesk | October 28, 2010 2:45 PM | Report abuse

It the money was paid by customers, why is it going to the Treasury Department and not BACK TO THE CUSTOMERS WHO WERE OVERCHARGED???

I want MY money back. The government has no idea what to do with money other than give it away to undeserving persons.

Posted by: damnit79 | October 28, 2010 2:47 PM | Report abuse

Wow.. I'm going to get a whopping $3.52.. That will go into paying my debt that the Government has put me in....

Posted by: CaptainSad | October 28, 2010 2:48 PM | Report abuse

The Britts are behind this? Bloody greedsters!

Posted by: VT123 | October 28, 2010 2:48 PM | Report abuse

same old Bell Atlantic

Posted by: FedCoder | October 28, 2010 2:50 PM | Report abuse

Shouldn't that money be REFUNDED to the customers with interest? We always get shafted, each and every time.

Posted by: citigreg | October 28, 2010 2:52 PM | Report abuse

The government openly working like the mafia. THey shake off Verizon, a crook, and keep the money. No money for you and me. It's like those lawyers going after injury victims, they keep most of the money of the settlement. It's all good business for them. We, well, we are just the excuse for them getting rich.

Posted by: coqui44 | October 28, 2010 2:57 PM | Report abuse

Oh my goodness. Do you guys ever proof your copy before posting? I can barely read through this piece without making numerous edits to the sentences. This is poor!

Posted by: writer_33 | October 28, 2010 3:00 PM | Report abuse

Um, I suppose you didn't read the whole article....

"Verizon said earlier this month it would refund about 15 million subscribers $52.8 million for those unwanted data charges. Verizon partly attributed the problem to a software glitch in phones."

C'mon guys, the victim crap doesn't look good on you.

Posted by: kathykayc | October 28, 2010 3:05 PM | Report abuse


Shouldn't that money be REFUNDED to the customers with interest? We always get shafted, each and every time.

Posted by: citigreg | October 28, 2010 2:52 PM

Try reading the article: The settlement to Verizon subscribers is $52.8M. There are 15 million of us, so do the math and don't rush out to get that new HD TV.

Posted by: eyestreet | October 28, 2010 3:08 PM | Report abuse

Hey you retards who are complaining that consumers are not getting repaid and thinking the gov is reaping all the rewards of this settlement -- I can't believe you are too dumb to read the whole article. It plainly said: "Verizon said earlier this month it would refund about 15 million subscribers $52.8 million for those unwanted data charges." I am definitely not standing up for Verizon -- they suck. But, so do you if you can't even read and comprehend. What the gov (that's actually us even if we don't take part) is "getting" from the extra $25M is a deterrent from other companies doing the same.

Posted by: LJKingMT | October 28, 2010 3:11 PM | Report abuse

When I questioned Verizon about this, I was told they couldn't do anything about it. They have to charge even if I inadvertently accessed the internet for a split second because they can't charge a portion of a cent!!! Also, check your bills, you may be surprised to see that we're all paying taxes on our service that go to underprivileged people so they too can have cell phones. NO JOKE!!!! Look closely, you'll see it there. It's a Federal tax. Our glorious, liberal government in action!

Posted by: kim23 | October 28, 2010 3:11 PM | Report abuse

Gentlemen,


Please note that this $25,000,000 is a FINE that is paid to the Treasury Department.


The article clearly states, "Verizon said earlier this month it would refund about 15 million subscribers $52.8 million for those unwanted data charges."


This may not be sufficient recompense. The government perhaps should pursue a more generous refund but it is not helpful to accuse the Treasury Department of taking the Verizon customers refund ($52,800,000).


Thomas Jefferson said that the best defense of Democracy is a well-informed public.


PLEASE READ WHAT IS PRINTED and respond accordingly.

Posted by: KennethAmerica | October 28, 2010 3:12 PM | Report abuse

Gee, all of $25 million. Guess they'll have to cut down on their corporate jet travel for a month.

Nah! They won't do that. They'll raise your rates.

Posted by: joachim1 | October 28, 2010 3:15 PM | Report abuse

$3.52 x 15 million = $52,800,000

So 15 million folks will be showered in glory with a $3.52 check, prolly that must be cashed within 60 days of the check date.

Oh boy! Let me surf the Net and see what I can buy!!!!!!

However, my phone service with Verizon was for years and a monthly charge...

YOU DO THE F**Kin MATH!

Posted by: darbyohara | October 28, 2010 3:32 PM | Report abuse

So Verizon, who typically reports quarterly profits any where from $900M to $1.7B, is going to pay a $25M fine. BFD. That is how much Verizon earns in profit on a typical Monday. And for overcharging that has been going on for "several years." Sure, this will deter other communication companies from ripping off consumers. I'll bet that the boys in the executive suite at Verizon are RAOTFLTAO.

Way to slap down on fraud there, FCC. If Federal regulators were in charge of the criminal justice system then aggravated assault would be a $10 fine and a very stern warning.

Posted by: hisroc | October 28, 2010 3:51 PM | Report abuse

VERIZON'S EXCUSE ABOUT A "SOFTWARE" GLITCH IS PURE 100% BS. ANYONE IN THE COMPUTER/SOFTWARE INDUSTRY KNOWS THAT ONE RULE TO FOLLOW BEFORE ROLLING-OVER A SOFTWARE CHANGE TO PRODUCTION IS TO RUN THE "NEW" SYSTEM PARALLEL TO THE EXISTING SYSTEM FOR SEVERAL MONTHS.
DETAILED ANALYSIS IS PERFORMED TO DETECT "GLITCHES" BETWEEN EXISTING AND NEW.
NOWHERE IS THIS MORE CRUCIAL THAN IN MONEY AND BILLING.
VERIZON MANAGEMENT SHOULD BE PROFESSIONALLY ASHAMED... BUT THEY ARE NOT. JUST BUSINESS AS USUAL IN GREEDY, UNPRINCIPLED BOTTOMLINE CORPORATE AMERICA.

Posted by: Pointvw736 | October 28, 2010 3:59 PM | Report abuse

Yes, right. Verizon did it by accident for several years to millions of subscribers.

Posted by: JHG_sec405 | October 28, 2010 4:18 PM | Report abuse

How interesting. We've been charged a lot of money over the past year or two for inadvertently hitting the wrong button and having the phone try to connect to the internet. There was NO way to hit cancel fast enough--the charges go through anyway, even if it's been only a few seconds and the phone is merely attempting to reach the internet. When I complained to Sprint, the charges remained, and I was told that it was my own fault. I retorted that I don't understand why my phone is permitted to access a feature I don't want to pay for but was told my phone wouldn't work right otherwise and so that ability had to remain. It hadn't occurred to me to complain to the FCC about this, but I think I WILL again raise this again with Sprint. Maybe in the wake of Verizon's fine and bad publicity Sprint will choose to behave more appropriately.

Posted by: HSerof3 | October 28, 2010 4:30 PM | Report abuse

From what I can tell, Verizon is a pretty big company. It's hard to believe that even a pretty big company could have an income stream of many millions of dollars a year, and not realize it and NOT ACCOUNT FOR IT. Whoops.
Hard to believe. In fact, impossible to believe.

Posted by: marklough | October 28, 2010 4:51 PM | Report abuse

Wow ... now there's a word I haven't seen in years!

"Regulation".

Hope to see it for many more years to come, too!

Posted by: topwriter | October 28, 2010 5:00 PM | Report abuse

Wow! The FCC needs to regulate and review charging consumers for services before you use them. VERIZON, COMCAST, DIRECT-TV, DISH and many service providers they charge you 2 months in advance when you open an account with these companies. The problem is they don't want to bill you to see your charges, THEY WANT TO CHARGE YOU MYSTERY CHARGES ON YOUR BILL. Hoping you will not contact the company to dispute the bill.

Posted by: drfields | October 28, 2010 5:29 PM | Report abuse

25 million is a record....let's shoot for $2.5 BILLION as a start, and 50 verizon people in jail for 50 years, maybe they'll start to get the message.

Posted by: porter-stephen | October 28, 2010 5:59 PM | Report abuse

EnoughisEnough1

I think the article stated that 15million subscribers will get refunded.

porter-stephen
Show me a blogger and I will show you a person demanding jail time. We bloggers are always demanding for someone to get fired, jailed or executed.

Posted by: ged0386 | October 28, 2010 6:14 PM | Report abuse

Good idea about jail terms for the senior execs and CEO at Verizon, p-s.

Posted by: WillSeattle | October 28, 2010 6:22 PM | Report abuse

Akin to Wal-Mart as the Great Satan of Retail, to me, Verizon is the Great Satan of Wireless.

About 8 years ago, a girlfriend of mine had to move across country to take care of her brother and sis-in-laws 3 children after the parents were in a near fatal car accident. So we bought phones and set up a Friends & Family plan with just us two on it. After about 3 months, Verizon started showing charges on the bill for ALL calls when maybe 3-4 a month were chargeable.

This would require nearly an hour on the phone with a service rep to untangle what should have been a no-brainer billing snafu.

This happened a total of four different times about a month apart each time, and so I had to pay a $170.00 early termination fee for calling a halt to the crummy service.

As far as I'm concerned, not enough 'bad' can happen to this outfit. They deserve all the grief they get.

Posted by: MT_Guy | October 28, 2010 6:24 PM | Report abuse

This has got to be driving the GOP nuts. They don't believe in government regulation, meaning that they don't care when Americans get screwed.

Posted by: camera_eye_11 | October 28, 2010 7:21 PM | Report abuse

Just think goobers! If we can get rid of that pesky FCC then we won't have to worry about being tricked into bending over and taking it up the yinyang, we'll be forced to -- and your bagger propaganda sponsors will be laughing all the way to the bank with YOUR money!

But then, you can't blame these mega-corps -- what else are you supposed to do with a flock of suicidally-stupid sheep but shave them and eat them?

Go Baggers!

.

Posted by: Frank57 | October 28, 2010 7:29 PM | Report abuse

For those whining it's only a $3.52 settlement, where does it say the $52M will be distributed equally? If 95% of the people never got charged the $1.99 then you'll be seeing about a $70 refund on average.

If Verizon is refunding things correctly, then your refund should be exactly what you were overcharged. If you saw 1000 of these false charges, you should get $1990 refunded. Conversely, if you were never charged this fee you will see ZILCH.

Posted by: getjiggly1 | October 29, 2010 12:33 AM | Report abuse

So what do actual customers receive--nothing? Seems like the government goes after these companies for these shady practices and wins cases but all the proceeds go into some treasury fund for what...at what point do us consumers get repaid in REAL MONEY!!!!! Another screwing by our government AND verizon...thanks for nothing!!!!

Posted by: michaelaudet | October 29, 2010 11:04 AM | Report abuse

To set a couple of things straight, with a number of comments here, I cross referenced this article with some of the other big papers, who obviously have other info in theirs. Verizon has said they'll be paying "refunds in the $2 to $6 range; some will receive larger amounts." Doesn't sound to me like you'll be getting 3 yrs interest (which in MHO they should be paying, having made how much themselves off that money over 3 years). As for the $25 mil, I quote "An FCC official said the $25 million is considered a voluntary payment and not a fine because a fine involves an admission of guilt. Verizon is instead not admitting guilt and accepting the voluntary payment, the official said.", so no, this is not a fine, which it should really be...took them 3 years to admit they had some paying back to do! Funny how they'll nail you for not paying your bill, happily charge you interest for as long as it takes, but the rules seem to change for them. All I can say is that I'm so relieved to be out of the whole nightmare of contracts and bills. Best way to ensure it doesn't happen is to go prepaid...no bill = no extras. Better yet, unlimited everything...that way you're covered regardless of what software bug there is! I know I pay net10 $50, that's it...no chance of extras! Leave the big names looking for something extra to bill the steadily declining contract users.

Posted by: AFenton1 | October 29, 2010 11:19 AM | Report abuse

Verizon settlement is a welcome message, it tells me the government is stepping in to protect people from businesses that over charge their customers, of course that is a never ending list of companies, every month I get statements with sur charges I don't know anything about, it is almost like an added tax that we pay to have the service, Now I wish the government would start regulating all the false Advertising on TV and Radio, the could start with the political campaign Ads, what is really bad is after the ads have been proven false, or unsubstantiated they continue to run them around the clock, if they were honest they would take them off the air

Posted by: jel6x | October 29, 2010 2:47 PM | Report abuse

ywah, another hollow victory!

only signal this sends = keep doing it.

Posted by: PindarPushkin | October 29, 2010 6:43 PM | Report abuse

"False" has a harsh tone that I think is unwarranted. Let's call them "incorrect."

Posted by: TheChileanPresidentIsMuchBetterRespondingToDisastersThanObama | October 30, 2010 2:18 PM | Report abuse

How about Sprint? Sprint charged me approximately $90 over a several year period after I had changed my long distance provider to a Hawaiian telcom company, even though Sprint was no longer providing long distance service to my land line. When I finally realized that I was being billed a small amount by Sprint on each billing cycle, I called them to complain. Their response was that they could refund only the previous 90 days. This should be the grounds for an FCC investigation and a class action suit and big fine as well.

Posted by: Monguse | October 31, 2010 12:00 AM | Report abuse

Who at the FCC or what other government agency do I report my FIOS billing problem? I've been talking to Verizon for months trying to get them to send me an itemized bill. I agree this settlement doesn't go far enough. If Verizon had to pay interest and punitive damages they might be motivated to fix their billing system.

My time is also worth money and so far I've wasted 3 hours trying to get a detailed bill from them.

Posted by: gmdolin | November 2, 2010 8:13 AM | Report abuse

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