Verizon Fined For Pretending That Limited Service Was Unlimited

from the watch-out-comcast... dept

Tue, Oct 23rd 2007 5:40pm — Mike Masnick

Back in 2005, we noted that Verizon Wireless was following the tactics of others in advertising "unlimited" wireless broadband services, while the truth was they were quite limited. As people later worked out, despite the claim of "unlimited," VZW was cutting off anyone who used more than 5 gigs of data per month. That's pretty limited, actually. When confronted about this, the company tried to argue that by "unlimited" it really meant "It's unlimited amounts of data for certain types of data." And they followed it up with this gem: "It's very clear in all the legal materials we put out." Right, see, that's the legal materials -- the stuff you know no one reads. Yet in the marketing materials it's quite clear that you're claiming "unlimited" and that has a pretty clear meaning. After many such complaints, Verizon Wireless finally started to back down from the false claim of "unlimited" earlier this year. Turns out that it wasn't because of any realization that lying to your customers is a bad idea, but because NY State was investigating the practice. NY has now fined Verizon Wirelss $1 million to be given out to customers who had their service unfairly terminated for actually believing that "unlimited" meant "unlimited." Of course, Comcast might want to start paying attention right about now. While lawyers everywhere are rushing to file lawsuits over its decision to jam broadband user accounts, before that happened Comcast was famous for many, many years for being one of the biggest ISPs to lie about offering unlimited service. It's a story that comes up in the press every year or so, and every year Comcast gives its own doublespeak about how it only cuts off the worst "abusers." However, it's still false advertising to claim unlimited service when that's not what you supply -- and it's hardly "abuse" if people are merely doing what you told them they could do.

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Filed Under: fines, limited, unlimited
Companies: comcast, verizon

22 Comments

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Anonymous Coward, 23 Oct 2007 @ 6:11pm

Nothing new here
Just like any other company that has a monopoly. Next, a Class action suit where the lawyers get millions and the members of the action get a $10 off coupon for a month of service (when they sign a five year contract) for the service. How will Comcast (or Verizon) ever survive such a serious penalty?

First
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Anonymous Coward, 23 Oct 2007 @ 6:56pm

Cost of doing business
$1 Million is just the cost of doing business. Besides, corporations do not feel pain. If the bottom line is in jeopardy, management will just lay off more people due to "financial pressures". The only result is that customer service will suffer. Although, it's hard to imagine how much worse customer service can get.

The only punishment that will have an impact is directly fining a fiduciarily responsible person (C level executive or member of the board). Make it come out of that person's pocket (no insurance, corporate reimbursement policy, etc.).

Once a little personal responsibility is injected into the mix, behaviors might change.

However, there is exactly zero chance of this happening. In lieu of that, the fines must be punitive enough to catch the attention of Wall Street and major stockholders.
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The Last Angry Man, 23 Oct 2007 @ 7:14pm

Good Luck
Cs or O level execs will never have their personal assets in jeopardy, this is the very shield afforded to them by incorporating by anyone for that matter, to shield personal assets from business assets.

A solution could be that, the CEO (add your flavor of C"blank"O) is fired w/o compensation for laying off folks and not giving a rats ass about anything other than the bottom line.

For those that are interested check out Gangs of America: The Rise of Corporate Power and the Disabling of Democracy. Open your eyes.
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R. H., 23 Oct 2007 @ 8:55pm

I Dislike Corporate Thuggery But...
If I was a stockholder in a corporation who had a CEO that DIDN'T watch the bottom line I'd probably be quite unhappy when my the value of my stock approaches the value of toilet paper. I truly believe that there are ways to earn money without screwing the consumer however, if those ways aren't espoused by the entire industry then the companies that choose to screw over its customers will have an advantage. I can't think of a good way to legislatively force that change without causing an even further worsening of the economy at least in the short to mid term. Maybe a few years ago during the dot-com bubble when we had a bit of breathing room but not right now.
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R. H., 23 Oct 2007 @ 9:10pm

I missed one point
How in the world did they advertise ANY type of broadband with a hidden 5GB/month limit? At just 1mbps you can get over 10.5GB in one day so I can imagine people going over that even in the 'early days of broadband' where 384kbps could be your d/l speed and even then that's 3.95 GB per day.

I transfer between 5-8 GB per day, and I'm on Comcast! I've been making sure that I stay under 200GB/month though to stay nice and far beneath undisclosed caps.
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Anonymous Coward, 23 Oct 2007 @ 11:07pm

Re: Good Luck
angryman, the phrase 'open your eyes' is a codephrase which will cause you to be perceived as a lunatic and invalidate your entire post, if not everything you've ever said. I advise against using it.
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Max Powers at http://ConsumerFight.com, 24 Oct 2007 @ 12:48am

Fines are a joke for companies
Many companies that get in trouble actually win. The fine is a joke, the customers get crap, and business continues as always ripping off the customer.

Blue Hippo stole millions from customers with their pay as you go computer offer because they never would deliver the computer. The fine when they got caught? $300,000.00.

My dream is somehow all consumers will gather and come up with a plan to screw these bad businesses by hurting them in the pocket book. Is it possible?
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Danny, 24 Oct 2007 @ 5:57am

What I fail to understand...
is how companies are allowed to market their products with offers, promises, and phrases that directly contradict the actually legal material? Isn't that false advertisement?
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RandomThoughts, 24 Oct 2007 @ 6:43am

OK, so the folks that were disconnected didn't have to pay early termination fees. Looks like that is a good way to get out of your contract. Just start viewing video from your "unlimited" data plan. Maybe you even get a refund on the devise you bought.
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Steve R. (profile), 24 Oct 2007 @ 6:58am

Where is the call for Corporate Ethics???????
What I find amusing about this current outbreak of corporate malfeasance is the absence posts demanding that corporations correct their abusive behavior by those who oppose regulation. By their silence, the obvious conclusion is that those who oppose regulation must secretly believe that it is OK for corporations to steal from your customers. If caught, you issue a meaningless apology and go onto the next scam.

I would think that those who oppose regulation would actively call for corporations to improve their ethics to avoid the imposition of onerous regulation. This obvious solution seems to beyond their mental grasp.

All I hear by the anti-regulatory crowd is that regulation "hurts" business. Ok if regulation "hurts" business and we live in a free market system where we are responsible for our actions; the obvious solution is act ethically. If corporations act ethically, there would be virtually no need for onerous regulation that would "hurt" business.
-----------------------------------------------
Thanks Max, I have been wondering what the scam was behind Blue Hippo. The Blue Hippo ads were laughable. "We will give you a break and not check your credit". Of course they don't mention that you have to pay upfront.
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Anonymous Coward, 25 Oct 2007 @ 10:32am

noyuigg boyurdvgytsenr or y9uwe9 r
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Anonymous Coward, 25 Oct 2007 @ 10:34am

Steven Is A Fat Head Hooker and his mother is a jump-off
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Steven's dad, 25 Oct 2007 @ 10:34am

Steven Is A Fat Head Hooker and his mother is a jump-off
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Rasheeda Martinez, 25 Oct 2007 @ 10:48am

If Rakim stills another one of my pads and use them for an icy hot I'm going to give him another scar on his forhead. Another thing if your reading this stop pissing your pants at night on your Betty Boop sleeping pants.
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Anonymous Coward, 25 Oct 2007 @ 10:49am

non spelling bastard, that's why your moms a crack whore
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Weshnak, 25 Oct 2007 @ 10:50am

Rakim, I just wanted to know if the date is still on tonight with me and you at my house if so make sure you bring the KY jelly and bandades.
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Donald, 25 Oct 2007 @ 12:17pm

Re: I missed one point
It's Verizon Wireless, and at the time of the lawsuit I believe they were promising 300-700kbps speeds.
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Woadan, 4 Jan 2008 @ 2:05pm

You'd think the company would have learned.

They had the same problem between marketing and legal materials when the old Bell Atlantic first started selling DSL service. Marketing/Sales would say unlimited, but the ToS said otherwise. They fixed that.

The wheel turns round and round.

Woadan
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Rico, 20 Apr 2008 @ 2:29pm

Re: Where is the call for Corporate Ethics???????
I'm with anti-regulatory crowd -- not because I approve of corporate scams like this, but because I don't trust the government to always know what is best for me.

The best way to stop this behavior is to expose it. If the government wants to help, they can pump money into consumer education, so that we know how to compare services accurately. Verizon's practices cannot stand the light of day.
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william marquart, 5 Jun 2008 @ 11:07am

verizon wireless unlimited
Verizon wireless is still offering unlimited which is by no means unlimited. They no longer cut you off instead like in my case they send you a bill for 5,000.00 dollars!!!!!
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Rosana Allinson, 28 Sep 2009 @ 12:18pm

Bundle
$79.99 is not what is to be it is costing me 799.00 in 3 months it was to be 79.99 and taxes now in 3 months I am being charged 799.00
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Jim Wiandt, 11 Dec 2016 @ 7:39am

JAIL THEM ALL
These guys at Verizon are THIEVES and honestly should be jailed for corporate malfeasance. The amount of time I have spent fighting them on phantom charges is INSANE. I honestly believe they should be in jail, and if I cared enough I'd make it my life's mission to do so.
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