Verizon sends $25 million settlement to FCC, credits customers $52.8 million for wrongful data fees

Verizon Wireless Settles Data Charge Issue in Agreement With FCC

BASKING RIDGE, N.J., Oct. 28 /PRNewswire/ -- Verizon Wireless works very hard to simplify the wireless experience for customers and to ensure that customer bills are accurate. 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.

We are issuing credits and refunds on our own initiative and because it is the right thing to do for our customers. Fixing this for our customers has been our aim since last year, as we stated publicly at that time. In September 2009, months before the Federal Communications Commission first contacted us, we implemented a free 50 kilobyte allowance to limit further inadvertent charges.

In a settlement with the FCC, we have agreed to a voluntary payment of $25 million to the U.S. Treasury even though the inaccurate billing was inadvertent.
The settlement acknowledges our prior announcement that we will reimburse about 15 million current and former customers who may have been mistakenly billed. The company will spend $52.8 million to reimburse those customers. We also will provide targeted information about data usage and tracking to new and existing customers, in both English and Spanish; establish a special internal team to track, identify and address customer data usage complaints; and provide additional training on data charge and credit issues to all of our customer-facing customer care employees.

We have already begun the process of repaying the 15 million customers for accidental past data charges that we discovered through our own investigation in response to customer inquiries. These inadvertent charges affect those customers who do not have data plans and choose to pay for data usage on a per megabyte basis. We are notifying eligible current and former customers that we are applying credits to their accounts or sending refunds in October and November. Current customers will be notified in upcoming bills; former customers will receive a letter and refund check in the mail. In most cases, these credits and refunds are in the $2 to $6 range; some will receive larger amounts. The rest of our customers, 77 million or roughly five out of six, are unaffected. We have taken steps to ensure this does not happen in the future.

By far the single largest problem, involving the vast majority of credits, was caused by a very small data "acknowledgment" session sent by software pre-loaded on certain phones. For customers who did not have data plans and who were not otherwise using data features on their devices, this triggered a "pay as you go" charge of $1.99. We never intended to charge customers for this "acknowledgment" data session. In other cases, we accidentally charged customers for access to website links that were not supposed to trigger data charges. Once again, this affected only some of the customers who did not have data plans, and who were not otherwise intentionally using the data features on their devices.

We have put in place additional improvements to resolve issues that caused these accidental charges. We are changing software on future devices to remove acknowledgments and prevent them from triggering the small data "acknowledgment" sessions. Other steps involve enhancing internal controls on website links that should be free to access, as well as additional software improvements.

We are a company that listens to its customers and in this case we got to the bottom of a problem and resolved the errors. We have taken this action because it is the right thing to do. We value our customers and their trust in us, and we do everything in our power every day to earn and keep that trust.