Verizon Wireless Issues Biggest Telecom Refund Ever

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LEGAL NEWS FLASH- Verizon Wireless announced it will issue refunds to 15 million customers who were wrongly charged for data use. Affected customers can expect credits on their October or November bills of $2-$6, and former customers will also be refunded. Verizon expects to pay out $50 million dollars, though it could go up to $90 million, making this the biggest customer refunds by a telecommunications company.

The refunds come on the heels of a 10-month FCC investigation into complaints about charges. According to The New York Times,

“The refunds will be paid to customers who did not have data access plans but who were nevertheless assessed one or more charges of $1.99 because of data exchanges initiated by software built into their phones, or because of charges for inadvertently going online on the phones.”

The preloaded demos of applications are supposed to be free, and yet the majority of affected customers were charged for this built-in software. The remainder of the 15 million affected customers experienced charges for accidental activation of the Verizon Web browser. Verizon will institute a buffer, allowing a certain amount of free data usage so that accidental activations of the browser don’t contribute to customers’ monthly bills.

The payout won’t really hurt Verizon financially (the company brought in 462.1 billion in revenue for 2009), but the gaffe doesn’t reflect well on customer relations.

“We’re gratified to see Verizon agree to finally repay its customers. 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,”

Michele Ellison, Chief of the FCC enforcement bureau, told the Wall Street Journal. According to LegalTechToday, the FCC may press Verizon to pay an additional penalty for failing to notify customers of the problem, which has been reported since 2007. The FCC may initiate formal enforcement charges, known as a Notice of Apparent Liability, or may enter into a consent decree with the telecommunications company, where Verizon would voluntarily pay to settle the issue. Verizon’s willingness to cooperate now probably bodes well for their chances of an informal settlement.

While this isn’t your standard recall that’s open to all, it does affect many individuals.
The lesson for individual consumers: if you notice unfair charges on your bills, or breaches of contract, don’t hesitate to speak up. You’re always allowed to write a Cell Phone Inquiry Letter to challenge a charge on your monthly statement. You can write a Complaint Letter to a Company, or if they still don’t take action, a Complaint Letter to the Better Business Bureau or Attorney General.