Verizon Wireless To Pay $90 Million Back To Users For $1.99 Data Fees It Insisted It Never Wrongly Charged

from the well,-look-at-that dept

Mon, Oct 4th 2010 2:16am — Mike Masnick

Well, well, well. For over a year now there have been widespread reports of how Verizon Wireless would charged users $1.99 for data services, even if they have data services turned off. This was happening sometimes to users with phones turned off or even batteries drained. The whole thing was incredibly questionable. Verizon customer service folks insisted that the people in question clearly accessed the internet, but there were so many reports that they had not, that this response didn't fly. Then, after the NY Times reported about it, the FCC finally woke up and asked Verizon Wireless to explain. Its response was basically a non-response, insisting that it had done nothing wrong -- and when David Pogue from the NY Times pushed the company about the over 400 accounts of it happening to his readers (and himself), Verizon Wireless' response was "I'm going to let the letter to the F.C.C. speak for us," repeated for every question Pogue asked.

That was in December of last year. Now, ten months later, Verizon has just announced that it's going to pay back "up to" $90 million in such bogus fees that it never should have charged to about 15 million subscribers. Apparently, those claims of not having done stuff wrong... well... it looks like that wasn't the case. It looks like they incorrectly charged people to the tune of perhaps $90 million (the company apparently thinks it could be more like $50 million once they've found all the false charges). Seems like a pretty big "accident," which they denied for so long. The latest statement suggests that Verizon Wireless "just" noticed these errors while "reviewing customer accounts," but given the number of complaints, and the fact that it's been going on for so long, including massive press coverage and an FCC investigation, you would think the company would have figured this out sooner.

Speaking of the FCC, it appears that it's not entirely satisfied with this customer refund, as the head of the FCC's enforcement bureau (or some PR staffer working there) amusingly quipped that the FCC was: "gratified to see the repayment, but for millions of Americans it's a day late and a $1.99 short."

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Filed Under: data fees, fees, returns
Companies: fcc, verizon wireless

29 Comments

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DMNTD, 4 Oct 2010 @ 2:27am

well...
OH SNAP!!
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millerjame, 4 Oct 2010 @ 2:39am

accident lawyer
john, If you've been injured due to the negligence of another, you may be compensated for certain losses. We're here to protect your rights and see that you receive a just settlement, contact at http://bit.ly/9be1LW
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Anonymous Coward, 4 Oct 2010 @ 2:44am

The F.C.C. is likely to press Verizon to pay a penalty for failing to notify customers of the problem, which has been occurring since at least 2007, according to people close to the talks.

NYT Article:
http://www.nytimes.com/2010/10/04/technology/04webphone.html?src=busln
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Paul Renault (profile), 4 Oct 2010 @ 3:54am

In an ideal world...
..the next time the press needs to get answers from Verizon and, say, Kathleen Grillo replies, they'll say: "Can we talk to someone else, please? Someone who won't lie to us."
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hmm, 4 Oct 2010 @ 3:56am

the cost of the refund...
To receive your verizon $1.99 refund, simply send a text message to 12345* with your name/address/bank details/favorite color.

*****texts cost $5 + network providers standard rate. You agree to subscribe to "why verizon is awesome" mailing list and agree to receive upto as many texts as we can spam you with until you feel like jumping off a bridge. Jumping off a bridge incurs a cancellation fee of $20.00. blowing your own head off with a shotgun incurs a fee of $30.00. blowing the head off of a verizon call centre monkey incurs a fee of $1.99
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ofb2632 (profile), 4 Oct 2010 @ 4:37am

theft
Why are they not being charged for theft? Theft of services, or larceny, or grand larceny? Or for creating a scam that bilked thousands out of hard earned money?
The corporations want the same rights as a private citizen, right? so, if i stole 90 million i would never see the light of day again.
Those that are on automatic pay, Verizon illegally stole money from those peoples accounts. That is a felony.
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Berenerd (profile), 4 Oct 2010 @ 5:38am

interest?
I wonder if its the $1.99 plus interest.
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Anonymous Coward, 4 Oct 2010 @ 5:44am

Re: theft
I agree. I just don't understand why the hell someone isn't going to rot in a cell for a LONG time for this. Every time something like this happens, someone should be going to jail, period. Or a lot of someones, as it was likely a dozen or more people ultimately responsible. Those lower down, who knew what was going on, but failed to do anything and were "following orders" should all get 1000 hours of community service. The ones who actually made the decision to rip people off should sit in jail for a few years.
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Steve R. (profile), 4 Oct 2010 @ 5:46am

No Real Disincentive for this type of activity.
Like the posts on the pre-settlement agreements there appears to be no penalty for adding a bogus charges to see if they are "overlooked". When caught, "sorry about that", give a refund and institute new bogus charges. Without a penalty what is to stop this practice?

Sprint was caught doing this type of activity too. We were not able to get a refund since you had to be a current Sprint customer. Based on the NYT article, it looks like the Verizon folks are getting a slightly better deal.

"Verizon said in its statement that the customers would receive credits from $2 to $6 on their October or November bills or, in the case of former customers, refund checks." (emphasis added)
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vzw guy, 4 Oct 2010 @ 6:02am

Great...
Now even more for me to clean up on the frontlines.
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Chuck Norris' Enemy (deceased) (profile), 4 Oct 2010 @ 6:33am

Re: interest?
If it is the interest that I have been getting on my savings account the last few years then you can forget it! (~0.14% annually...darn economy)
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Tim (profile), 4 Oct 2010 @ 6:35am

AT&T does the same thing
If you're not on a data plan with AT&T and accidentally hit the web browser button on your AT&T phone, which happens often with some models, AT&T hits you with a $2.00 charge for internet access, even if you don't do anything but hit the AT&T mobile home page. The $2 charge is for 2 megabytes of data, which is the minimum that AT&T charges now. It used to be a penny per kilobyte, so accidentally hitting the web button wasn't too costly. However, now, the minimum is $2. Of course, you can accidentally hit the web browser button a lot for that $2 during the billing period, but AT&T shouldn't charge anyone for just hitting their home page. You'd think with all the class actions lawsuits around, something like this would be a slam dunk by a law firm for all the aggrieved AT&T customers. Guess there are smaller fish to fry that are easier to catch.
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out_of_the_blue, 4 Oct 2010 @ 6:36am

Example of super-rights from corporation.
@ofb2632 and others: "Why are they not being charged for theft?" -- Because corporations are *superior* to "natural" persons, not just in being immortal but in operating with impunity. That corporations are effectively above common law is an open secret that The Rich know full well and the rest of us, still chained down by morality, can't quite believe. But The Rich spend their time thinking up ways like this to chisel without it being noticed. So at least 25 million times Verizon committed petty theft, and nothing will be done by gov't drones because they're owned by corporations.
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bdhoro, 4 Oct 2010 @ 6:37am

Bullshit they didn't know!
I got falsely charged like $20 for a month of rhapsody because my phone accidentally accessed the service in my pocket - didn't download anything, listen to any music, just hit the rhapsody button and didn't cancel it fast enough.

When I saw my bill I argued with managers as high up as I could get for over an hour and they all fed me the same bullshit that they can't do anything except turn it off for next month. To me that's clear proof they knew exactly what was going on and purposely kept it going.

And my real problem is that the $90 Million dollars misses the point completely! Like these 15 million consumers are really missing their $1.99 so much, its a real boost in this depression! I got scammed out of $20 from their bullshit really I could care less about them refunding me.

What I really care about is that if I have a problem and call and complain about it for over an hour that something actually happens before the FCC gets involved.
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Joe, 4 Oct 2010 @ 6:57am

FCC should fine them
After a refund is issued I think the FCC should fine them an additional $10MM or so and start creating real rules and regulations to stop these practices from occurring in the future. Consumers are fed up and nothing is done, and this isn't just with Verizon but with all cell phone carriers who add ridiculous fees and do nothing to make things easy for their consumers.
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Anonymous Coward, 4 Oct 2010 @ 7:05am

http://media.grc.com/mp3/VerizonCantCount.mp3
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Anonymous Coward, 4 Oct 2010 @ 7:28am

Where was Congress. They have the to grill CraigsList while the REAL criminals continue on like nothing happened.
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Hephaestus (profile), 4 Oct 2010 @ 8:03am

Re: Re: theft
"I just don't understand why the hell someone isn't going to rot in a cell for a LONG time for this. Every time something like this happens, someone should be going to jail, period."

What are you talking about! That would force corporations to start acting resposibly. It would force CEOs and board members to think of the consequences and not just the bottom line ...
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Steve R. (profile), 4 Oct 2010 @ 8:08am

Re: Bullshit they didn't know!
This reminds me of another pet-peeve. My wife bought a pre-paid card without knowing the hard to read/hidden details. The card had VERIZON plastered all over it in BIG print. In little print, the underlying company was disclosed. Also the notation of "no refund" and "expires in 30 days after activation". When we read the terms of service we went back to Walmart to get a refund. Walmart refused to give us a refund, even thought the card was never activated. Verizon lamely claimed that it was not their card.

Basically this becomes a scam. You should be able to get a refund when you find out in a reasonable period of time that the terms and conditions of use are reprehensible.

My biggest outrage over this is that if VERIZON has their name plastered all over the card, then it becomes their responsibility. But unfortunately we seem to live in a business environment were corporations feel they can mislead the public with impunity.
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DanVan (profile), 4 Oct 2010 @ 11:13am

Shocking. A company gets called for an illegal practice and denies it even through a MOUNTAIN of evidence but then admits it while paying a minimal penalty.

What garbage....why would ANYONE think this laughable penalty is a detterant for any fyuture stealing of the customers money like this
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Anonymous, 4 Oct 2010 @ 2:22pm

Anti consumer corporate america
I still cannot understand how these wireless companies in the States hold their customers to ransom. How is it in anyone's advantage to have phones exclusive to a carrier? How is it to anyone's advantage to have phone software crippled and raped by the carrier?

Here in Australia it is against the Trade Practices Act to force someone to buy a service when they buy a product. It is called 3rd line forcing. As such, there is not a phone available that can ONLY be purchased through a carrier.

The original iPhone was only available on a plan from certain carriers. Apple claimed it was not 3rd line forcing when they allowed multiple carriers to sell the phone. However, when the iPhone was replaced with the 3G, it was magically available from the Apple stores without a contract.

A smart consumer here in Australia will go out and purchase a phone for $300 to $900 and then go out an purchase a plan to suit. This way the consumer can pick the phone to suit his needs and then pick a plan to suit his needs. Not like in the US where you need a massive plan to be able to purchase certain smart phones. The other advantage is that you get to use the manufacturer's software, rather than the carrier's software that never gets updated.

The other advantage of buying the phone and choosing your own plan is that you are not bound by 24 month contract periods. If a carrier here in Australia charge an erroneous 2 bucks and took a year to refund it, most of it's customers would have already moved on.

So the 3rd line forcing that is perpetrated by wireless carriers in the states is terrible for the consumer as it is too easy to get ripped off by the carrier. Consumers are locked into 24 month contracts with expensive ETFs and no other choices. I am surprised that the land of the free does not have adequate protection for it's consumers. It's almost like your government is run for the corporations, rather than for the people.
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John85851 (profile), 4 Oct 2010 @ 4:55pm

Re: No Real Disincentive for this type of activity.
There is no real penalty to stop this practice. Verizon bills 50 million people $1.99 and gets $100 million for basically doing nothing (did they provide a service? did they provide a product?). Then, even at 0.14% annual interest, they get an additional $1.4 million a year. And they did nothing but tack an extra $1.99 onto their customers' bills.

A fine of $90 million takes a chunk out of the $100 million they took in, but again, this is almost pure profit. Like most companies, this will be seen as a "cost of doing business" and they'll figure out a way to hook people into paying for more services. For example, part of settlement could be offering customers a $1.99 trial offer which auto-renews at a rate of $29.99 per month.
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Nick, 4 Oct 2010 @ 7:42pm

Haha, this may help Verizon out:

http://mysterytricycle.com/5-songs-im-sorry-songs-fit-for-verizons-apology/
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Tek'a R (profile), 4 Oct 2010 @ 8:13pm

Re: AT&T does the same thing
There is also no way to disable these buttons or otherwise remove the functions from the flashed-in branded OS crapware that all the carriers inflict on their phones.

Friend of the family got into a huge tussle over these push-button charges with their carrier. Apparently a slightly more mature (ok, elderly) family member would often press the little web services button because it was near the answer-call button.

This kicked over a charge every single time. When asked at the store, the sales/repair crew had no way to disable or limit that key or remove the function. When wrestling with the billing department they just hit a stone wall of "our computers show he was accessing the data plan, nothing we can do"

iirc they eventually got fed up, paid up and broke contract to switch to prepaid phones.
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ltlw0lf (profile), 4 Oct 2010 @ 11:17pm

Re: Anti consumer corporate america
The phones are locked here because it costs $400-500 to buy a non-locked phone (if you can find one,) but you can go to any phone company and get a no frills cell phone for free (plus a $70 processing fee.)

I'd prefer to buy an unlocked phone (except my phone company won't support it if I do,) but most folks don't want to if it means that they have to spend a lot of money to buy the phone. You can find unlocked phones online, but it is often hard to get a US provider to give you the SIM to go into the phone and they will sometimes lock the phone to their service even if you bought it unlocked, unlike providers in just about any other country I've been to. Verizon does not use GSM, so they don't use SIMs either (they use memory cards similar to SIMs for some reason, but those do not work with GSM phones.)

It is really dumb...but with the crappy system we have here, it doesn't look like it will change any time soon since they have effectively lobbied congress to stay out of it (even though what they do is the very definition of anti-trust.)
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Anonymous Coward, 7 Oct 2010 @ 4:02am

Re: the cost of the refund...
that is perfect!!!
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annonymous annie, 7 Oct 2010 @ 4:05am

Re: Re: theft
I agree, if we did something like that we would be "scamming" and sent to jail!!!!!!!! grrr how frustrating.. a nd why did it take the FCC so freaken long to investigate? I guess we should all complain to the FCC first and see if that gets them moving faster?
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Anonymous Coward, 18 Aug 2015 @ 3:35pm

Verizon shreds checks no way to audit billing system how is this legal
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Anonymous Coward, 18 Aug 2015 @ 3:43pm

Charged double for their nickel /min.dime per min. Again no refunds
co.plants no reponses.
sent certified letters no repondses
worst busines award
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