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Verizon Wireless plans $50M refund to customers; admits wrong charges

Updated at 8:45 p.m. ET

Verizon Wireless admitted on Sunday it had erroneously charged customers for data services they didn't want and said it would refund more than $50 million to those cellphone users.

The announcement, among the largest customer refunds by a telecom service, comes amid complaints that users were unintentionally accessing the Web and using other data services, only to find those mistakes through extra charges on their monthly service bills.

The Federal Communications Commission had been investigating the alleged practice and said Sunday it would continue its formal probe, which could lead to additional penalties on the nation's largest wireless firm.

Verizon said that over several years, 15 million customers were charged from $2 to $6 for data services they didn't initiate. A source close to the company said Verizon Wireless will pay refunds to current and past customers for the error.

update: Current customers will receive credits to their accounts over October and November. They will be notified of the credit through their regular billing message. Former customers will receive a refund check in the mail.

The FCC, which inquired about the practice after complaints and media reports of "mystery" Internet and other charges said questions remained. The agency began its investigation 10 months ago and was engaged in talks with Verizon Wireless over a settlement.

"We were gratified to see Verizon agree to finally repay its customers," said Michele Ellison, the FCC's chief of enforcement. "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."

Some customers, with basic feature phones, said they signed up only for voice and in some cases voice and text services but saw monthly data charges appear on their bills.

Verizon's announcement Sunday appeared to contradict earlier statements to the FCC that it does not charge for accidentally accessing the Internet on its phones. In a response to a letter of inquiry by the FCC, Verizon said in December 2009:

"In order to protect customers from minimal, accidental usage charges,
Verizon Wireless does not charge users when the browser is launched, and opens to the Verizon Wireless Mobile Web homepage. If the browsing session ends there without the customer navigating to another Web page, the customer will not incur charges for Mobile Web browsing. Verizon Wireless strives to ensure that customers are not billed for minimal accidental data usage charges."

In their statement Sunday, Verizon said the users affected did get charged for accidentally launching the Web browsers on their phones. The company said the majority of charges were related to a software glitch.

"The majority of data exchanges caused by software built into their phones; others involved accessing the Web, which should not have incurred charges," Verizon deputy general counsel Mary Coyne said in a statement. "We have addressed these issues to avoid unintended data charges in the future."

A spokesperson did not immediately respond to a request for comment about why the company announced the refund Sunday evening and why its remarks appeared to contradict earlier statements to the FCC.

Wireless subscribers, meanwhile, aren't replacing their phones as often as they used to because of higher monthly service fees and tighter household budgets. The FCC is looking into ways to help consumers avoid surprise fees with a "bill shock" order that would require cellphone service providers inform users through text messages of sudden increases in their monthly bills. The wireless association is fighting against the policy, which will be explored at the FCC's next meeting in October.

By Cecilia Kang  | October 3, 2010; 9:56 AM ET
Categories:  Consumers, FCC, Verizon  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: EZ Texting, T-Mobile settle text blocking suit
Next: Verizon Wireless still faces FCC scrutiny over wrong data charges


I'm just sooooo amazed that all of these companies "accidently" make mistakes that cost their customers, then, for some odd reason, their customer service sucks so bad that it takes an hour to correct the problem. Hmmmm. Need I wonder why they never make mistakes in the customer's favor? Hmmm.

Posted by: DJMonet | October 3, 2010 7:47 PM | Report abuse

Verizon used to have integrity when they were Bell Atlantic. Since the merger, they have been predatory. Customers must be vigilant and contest weird and abusive charges. Hold them to the fire.

Posted by: maus92 | October 3, 2010 7:56 PM | Report abuse

They overcharged me $50 last month due to these erroneous data charges. They transfered me from customer service to tech support who told me I must be accessing the web and downloading images without knowing it. I've had my phone since 2005 and they were charging me for things I knew my phone wasn't capable of doing. It took me a long time on the phone to get them to refund part of the money. Customer service wasn't even nice about it and they assured me the charges were mine!
I see an iPhone4 in my near future.

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Posted by: 1561705755 | October 3, 2010 8:31 PM | Report abuse

Yeah, they charged me for it, on an emergency phone that is only used once or twice a year, and NEVER for data. But their customer service dept REFUSED to remove the charge.


Posted by: thomasmc1957 | October 3, 2010 8:33 PM | Report abuse

This happens on my Sprint phone all the time--and I've complained, and they insist that I'm receiving data because their records show that I am. Now I have a better basis for my complaints.

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Posted by: fishse | October 3, 2010 8:47 PM | Report abuse

Speaking of ripoff artists, have you noticed that the majority of posts on this thread are from commercial spammers?

Posted by: thrh | October 3, 2010 8:51 PM | Report abuse

Glad to see somebody is sticking it to the WaPo leftists. Besides, $33 for a Coach handbag sounds like a steal.

Posted by: screwjob21 | October 3, 2010 9:09 PM | Report abuse

Spammers search for the keyword "Verizon" because they know it's open season.

Posted by: sasquatchbigfoot | October 3, 2010 9:10 PM | Report abuse

I've been an individual residential Verizon DSL customer for years -- until today. I have just had a nightmarish experience of repeated disruption of service, incompetent "technicians", and lies. I HATE Verizon and would not recommend the company to my worst enemy. Today I finally called Comcast and by Friday will no longer be paying Verizon for landline or broadband. I feel like a free man and urge all who may see this to BEWARE of Verizon.

Posted by: miglefitz | October 3, 2010 9:32 PM | Report abuse

Verizon's admission shows they are willing to make a dishonest buck whenever an honest buck isn't enough. That's how the CEO pumps up Verizon's stock price and he gets his egregiously large annual bonuses. I have found Ivan Seidenberg's office to be responsive to snail mail, which is to say somebody from his office in Lower Manhattan will call you when you complain.

Posted by: BlueTwo1 | October 3, 2010 9:58 PM | Report abuse

To Miglefitz: Comcast isn't perfect either. But, we've been pretty happy with it. We also dropped our Verizon land line phone (and with it, all those add-on fees they put in small print on the bills). And, when your Comcast cable bill starts getting out of hand, you can call customer service and they can manipulate your services to reduce your rate without losing anything. We've done it several times.

So, our high-def TV, high-speed Internet and phone line is now all on Comcast. Trouble is, none of them work when the PEPCO power goes out. LOL So, make sure you still have a cell phone to fall back on.

Posted by: putdepuckindenet | October 3, 2010 10:06 PM | Report abuse

Several times a year I get data charges posted to my account, even though I have these features locked out from my service. I call Verizon to tell them about the error and they agree to remove them as a "courtesy" and refuse to admit they ever make mistakes with these charges. The last time this happened, I asked to be forwarded to a supervisor because I was so sick of this happening and of the attitude they flicked me each time I protested. Interestingly, even though they took away the data charges, I was hit with a higher than usual "other charges" amount the following month. The bottom line is, these companies do whatever it takes to make money and don't care who they have to sc**w in the process.

Posted by: pulliamp | October 3, 2010 10:09 PM | Report abuse

Wow! Verizon is overcharging customers for ALL services they provide. They charge me $15 for game pack, which never was ordered with the phone, internet bundle. These bundles are a way for these companies to cheat us. I am going back to basics! Simple land-line phone.

Verizon customer service never wants to refund you for errors the company charge you. FCC needs to run a complaint line to investigate fraud allegations from these companies.

Posted by: drfields | October 3, 2010 10:10 PM | Report abuse

Beware of these spammers offering free shipping. I tried one once. Yes, shipping is free, but they will charge you $10-20 for mandatory "insurance." It's a ripoff.

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Posted by: Bitter_Bill | October 3, 2010 10:11 PM | Report abuse

I'm a Verizon customer and three seperate times I requested to be with drawn for the data service. I did not ask for it and was getting Verizon Text messages weekly at odd hours of the day. I hope I am one who will be reimbursed.

Posted by: npsilver | October 3, 2010 10:24 PM | Report abuse

This is the reason I left Verizon for AT&T. It's bad enough they charge what they do. It's another thing to lie to us about the charges on our bill. My AT&T bill I can figure out. Verizon Wireless charges I never will.

Posted by: rmtaylor2 | October 3, 2010 10:36 PM | Report abuse

"I see an iPhone4 in my near future.

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Posted by: thrh | October 3, 2010 11:37 PM | Report abuse

"Spammers search for the keyword "Verizon" because they know it's open season.

Posted by: sasquatchbigfoot"

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Posted by: thrh | October 3, 2010 11:39 PM | Report abuse

Why the sexual metaphors? Because people don't understand money, but they understand rape.

Posted by: thrh | October 3, 2010 11:41 PM | Report abuse

Why hasn't someone blamed this on Obama yet? You teabaggers are losing your touch.

Posted by: Froomkin_fan | October 4, 2010 7:43 AM | Report abuse

Verizon Wireless is insidious. They advertise a Hotspot service on the Droid phones but fail to mention the extra $20 monthly charge on top of the $30 "unlimited data" charge. And then one discovers how unstable and unreliable this "hotspot" really is. Verizon Wireless, the face of poor customer service and corporate greed run amuck.


Verizon Wireless customer #095623

Posted by: davemarks | October 4, 2010 8:30 AM | Report abuse

Those who think the iPhone/ATT syndicate is a solution to their Verizon woes are preparing to jump from the proverbial frying pan into the fire. I don't know about fraudulent charges (though I'd bet there are plenty), but I how about these for starters: the ridiculous price of the iPhone4, its habit of breaking up and dropping calls, ATT's abysmal service history. I write this not to defend Verizon (I'm a customer with plenty of complaints), just to point out that other options may be no better.

Posted by: mbrachman | October 4, 2010 8:32 AM | Report abuse

I switched to virgin mobile, $25/month for unlimited text and data, with 300 minutes of talk. Verizon was too expensive.

Posted by: win_harrington | October 4, 2010 8:50 AM | Report abuse

Let's see... I was overcharged about $200 two years ago. Called Verizon. Basically told "Go pound salt". Reported to FCC. Basically told "So". More than likely charges were based on accidentally pushing button and BANG $1.99. Verizon clerks (two of them) said it was a $1.99 even for one page... not 1MB. Even got charges after supposed total internet block placed by Verizon and received written confirmation from Verizon that block was in place (which also prevented "included in plan" free sending of photos). Let's see... assuming I get a $6.00 credit (my 2 yr contract is up the start of November and I'm gone)... it would seem that if you take money unfairly, the equitable solution is to compensate the aggrieved party interest on the sum taken at 1.5% for two years and then you get to keep the money. Great deal! Anybody out there got 1-2 million dollars for me (I'm not as greedy as Verizon)? BTW, great negotiation FCC... wonderful job... you've got those robber barons quaking in their million dollar offices, eh,... homes, eh,... vacation condo, eh,... private jets, eh,... yachts, eh,... well wherever they happen to be at the moment.

Posted by: thinking1962 | October 4, 2010 8:54 AM | Report abuse

How and when will we see this refund, the article or interviewer forgot that most important fact. Do we have to ask for it or will Verizon willingly refund, which I strongly doubt!!!!

Posted by: rosenfan1 | October 4, 2010 8:54 AM | Report abuse

does this mean i get a refund for text services we've never used and have requested to be removed from our plan for the past 4 years?

Posted by: boblesch | October 4, 2010 10:19 AM | Report abuse

We've had these same charges appear every few months on our phones also. The first time it happened, we asked them to lock aout all internet access on the phones. We have a very basic phone with a one inch screen - we have never used it for any kind of internet access. The CSrs always took the charges off, but they did so very reluctantly and very clearly inplied that they were doing us a great favor since they believed we were cheating Verizon somehow.

I find it very hard to beleeve that Verizon took two years to figure this out. Funny how these big companies always seem to make billing mistakes in their favor.

Posted by: josetucson | October 4, 2010 10:38 AM | Report abuse

This is no accidental mistake from Verizon. These carriers have definite plans to up-bill customers for erroneous charges and most of the time the customers are too tired of complaining and they pocked the $$. Same thing for AT&T and less so for T-Mobile. So be careful and read your invoice monthly.

Posted by: Terminator2 | October 4, 2010 11:13 AM | Report abuse

We have had a Verizon cell phone for almost 10 years, this data charge showed up when we added texting - $5.00 per month now for several years and each time we called and got a different answer to why and what the charge was for. I want each months $5.00 back and they probably added sales and federal taxes on top of it. They created their own bailout.

Posted by: dchsma | October 4, 2010 12:05 PM | Report abuse

I sighed up last year and I fought VErizon each billing so they blocked our access to the internet. This year, with renewal they tried it again! I refused the "DATA" service and documented my claim immediately. Let's see what happens now: I'm ready to bring them into court if they try to slime themselves out of this decision - Resistance works! george62, Tribal Elder

Posted by: georgetomer62 | October 4, 2010 1:25 PM | Report abuse

First it was the BP megaspill, now this. Same on you Limey wonkers!

Posted by: JONWINDY | October 4, 2010 2:15 PM | Report abuse

I'm surprised Verizon is getting hit with this instead of the cellphone manufacturers whose devices enabled both people and the phone to accidentally access the web.

Posted by: ccs53 | October 4, 2010 2:45 PM | Report abuse

Why did Verizon take so Long to remedy this problem?? From a business stand point, think of how much interest they may have earned on millions of dollars... or the enormous amount of dollars saved in interest over the years from not having to borrow. It was beneficial for Verizon to hold on to that money as long as possible. Verizon should be paying customers back with INTEREST.

Posted by: HopeForAmerica | October 4, 2010 3:00 PM | Report abuse

"A defect in Verizon's phone software caused at least 15 million wireless customers to be charged data fees, even if they didn't subscribe to data plans, Verizon said in a statement Sunday."

The new scapegoat, defective software. Defective software my A$$. There was no defect in the software, it did precisely what it was coded to do. It was a calculated gamble. That no one would be diligent enough to discover it. This is a pandemic.

Posted by: morphylius | October 4, 2010 9:13 PM | Report abuse

Verizon also rips people off on their "All On One Bill" program. In this program, the cell phone charges can be added to your "Home Services" bill, so you only have one bill to pay. Great… sign me up…. The problem is that the cell phone billing "conveniently" goes to Verizon "Home Services" one day after the bill is sent to you. By billing that way, Verizon nails you for 2 months of penalty charges before you even see the first month’s problem. I didn’t recognize I had a problem before I had accumulated 2 months of “overage” fees and changed my plan to include more texting. That added up to a lot more than $1.99. Deceptive billing practices.

Posted by: rgn2222 | October 5, 2010 4:09 PM | Report abuse

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