Verizon Wireless Data Settlement Sets FCC Record
Verizon Wireless agreed to pay $25 million to the U.S. Treasury after charging more than 15 million Americans an estimated $52.8 million in unwarranted fees for data use, the FCC announced Thursday. The payment, agreed to by Verizon in a consent decree, comes as the commission considers wireless bill-shock rules. Only two companies had previously agreed to pay $10 million or more under a consent decree with the FCC, including in a $24 million 2007 settlement with Univision over company claims that soap operas for children satisfy the commission’s educational programming rules.
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FCC officials told reporters that other carriers are under investigation, but they wouldn’t elaborate. Like the bill shock proceeding, the action against Verizon shows the commission’s focus on billing practices, the subject of many consumer complaints, officials said. Last month, the FCC’s Enforcement Bureau announced that Verizon would pay back customers for data charges incurred when they accidentally pressed a handset key launching mobile Internet service (CD Oct 5 p3). Verizon said at the time that most were owed only $2 to $6.
"Today’s consent decree sends a clear message to American consumers: The FCC has got your back,” Chairman Julius Genachowski said in a written statement. “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. In these rough economic times, every $1.99 counts."
Verizon Wireless didn’t acknowledge wrongdoing in the consent decree, but the company agreed to take “reasonable, affirmative steps to cease applying the mistaken data charges” and to refund customers for over payments within 45 days where possible. Verizon also agreed to review past data usage by any customers not included in the settlement “to determine whether he or she is entitled to a reimbursement."
"Today’s settlement also includes strong FCC oversight and accountability to ensure that Verizon Wireless fully repays what they owe to their customers and puts new measures in place to improve customer service,” Genachowski noted.
"Verizon Wireless works very hard to simplify the wireless experience for customers and to ensure that customer bills are accurate,” the company said in a statement. “Nonetheless, internal billing processes can be complex and, in this case, we made inadvertent billing mistakes. We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills.” Verizon Wireless said only about one in six of its customers was affected. “Fixing this for our customers has been our aim since last year, as we stated publicly at that time,” the company said. “In September 2009, months before the Federal Communications Commission first contacted us, we implemented a free 50 kilobyte allowance to limit further inadvertent charges."