Verizon Agrees To Pay Up For 'Inadequately Disclosed' Fees For Broadband Customers

from the but-inadequately-disclosed-fees-is-how-we-survive! dept

Mon, Nov 17th 2014 3:46pm — Mike Masnick

We recently wrote about a lawsuit filed in New York against Time Warner Cable for "deceptive acts and practices" regarding hidden charges and fees, and a failure to deliver a promised rate for broadband access. Tons of people have been pointing out that they've seen the same thing -- and now, down in Maryland, Verizon has agreed to pay $1.375 million to Verizon FiOS customers who found they were hit with a variety of hidden and unexpected fees with their broadband connections:

The telecommunications company agreed to pay about $1.375 million to Maryland customers who the state's Consumer Protection Division says were improperly charged termination fees or had to pay for "inadequately disclosed" equipment costs in order to use the service, according to the attorney general's office.

The firm also agreed to pay a $250,000 penalty to the state, and $75,000 in costs

Of course, in agreeing to settle, Verizon also "denied that it violated any Maryland laws" but promises to more accurately represent fees in the future.

The settlement follows a wide-ranging investigation of Verizon, including its alleged failure to deliver promised promotional items to new FiOS customers, such as free televisions and gift cards; its offer of bundled prices that did not include the cost to lease equipment necessary to receive the services; its alleged practice of assessing early termination fees when customers cancelled after they did not receive what they had been promised; and other issues, including billing complaints, contract disputes and poor customer service. Although Verizon denied that it violated any Maryland laws, it agreed to a settlement that addresses the Division's concerns.

This is not the first time Verizon has had to pay up in this manner. Obviously, the amount paid up here is barely even pocket change for Verizon, which is why these kinds of activities continue. When you have monopolistic or near monopolistic control over your market, you can get away with all sorts of questionable fees and charges on users.

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Filed Under: consumer protection division, fees, fines, maryland
Companies: verizon

9 Comments

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velox (profile), 17 Nov 2014 @ 4:08pm

Only 49 states to go.
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Mason Wheeler (profile), 17 Nov 2014 @ 4:51pm

Gotta love "cost of doing business" fines.

As I've said before, if you actually want businesses to behave better, the "cost of" bad behavior has to be painful. Verizon just paid out approximately $1.6 million over this case. If they made $5 million (just making up a number here, no idea what it was actually worth) off of their misbehavior, then that can be regarded as a 300%+ return on an investment of lawlessness!

The standard really needs to be "crime does not pay." If they made $5 million on this, the fine needs to be $10 million at the very least. Make the ROI negative--fix the incentives--and they'll stop doing this. (While lobbying for a return to easier laws, of course.)
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Tim A, 17 Nov 2014 @ 8:42pm

Verizon: Sure we screwed people, but it was within the law.

Jerks.
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David, 17 Nov 2014 @ 9:34pm

Monopoly had nothing to do with it, dearie
When you have monopolistic or near monopolistic control over your market, you can get away with all sorts of questionable fees and charges on users.

Reality check:
its alleged practice of assessing early termination fees when customers cancelled after they did not receive what they had been promised;

Monopoly power would mean exploiting a situation where the customer has no viable alternative. When the customer says "I'd rather have nothing than that", that's the end of it.

At this point Verizon is no longer able to make use of monopolistic power and is instead "only" using the power of being a bully with a large legal department and deep pockets.
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- Pragmatic, 18 Nov 2014 @ 3:51am
  
  Re: Monopoly had nothing to do with it, dearie
  This thing or nothing isn't a viable alternative. It's why people often put up with crappy deals. "Nothing" is not a competitor, okay?
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Anonymous Coward, 17 Nov 2014 @ 10:44pm

The fines should have been in the multi-billion-dollar arena, rather than a piffling sum totalling approximately $10/customer.
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Ninja (profile), 18 Nov 2014 @ 5:34am

Obviously, the amount paid up here is barely even pocket change for Verizon, which is why these kinds of activities continue.

That's why I think companies should be fined in terms of percentage of their annual revenue. For instance light problems would lead to 1% fines while severe breaches would gobble whole 10%. That would lead to billion dollar fines and companies thinking twice before trying to be smart asses.
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jim, 18 Nov 2014 @ 6:46am

still waiting
But, if you or I defrauded someone? Minimum of 6 months. Still waiting for acorperation to do time.
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Anonymous Coward, 18 Nov 2014 @ 8:01am

my sister-in-law in NYC found she was being billed $11 each month for a 'back up' service. not only had she not used it, she hadn't even installed the needed software. when she contacted Verizon about it, they stopped the monthly charge but refused to reimburse any of the 'stolen' fees. it worked out to around $120. not that much, i agree but think of even a few thousand customers and Verizon has a dsamn big kitty that they can use for anything they like and it hasn't cost them a thing!! now add in millions of customers and see the figure escalate! no wonder in the post Verizon aren't admitting to breaking any law, while at the same time agreeing to pay back to customers. until there is a case over this, it and others will carry on doing it. the interest alone that they have gained has gone straight into the kitty and i very much doubt if only the bare minimum amounts have been payed back!!
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