Verizon Forks Over $25M for "Mystery Fees"

By Cindy Waxer October 29, 2010

Marking the highest voluntary payment in FCC history, Verizon Wireless agreed to pay a fine of $25 million and fork over at least $52.8 million in customer refunds.

Disgruntled consumers prompted an investigation by the Federal Communications Commission into the company’s reported $50 million in “mystery fees” charged to cell phone owners. Apparently, a defect in Verizon’s phone software caused customers to receive false charges of $2 to $6, which Verizon promised to credit to customers’ bills in October and November. The refund is reported to be one of the largest in wireless network history.

Although earlier this month Verizon said it would issue refunds to 15 million customers, the FCC announced that the company will have to pay an additional $25 million to settle the case.

"Verizon Wireless works very hard to simplify the wireless experience for customers and to ensure that customer bills are accurate," Verizon said in a statement. "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."

Accusations of erroneous charges date back several years. In fact, the FCC began investigating the issue in January, according to a statement released in early October by Michele Ellison, the FCC's enforcement bureau chief. At the time, the FCC asked Verizon Wireless about $1.99-a-megabyte data access fees that appeared on the bills of customer who didn’t have data plans but who inadvertently initiated data or Web access by pressing a button on their phones.

Despite making amends, many consumers, as well as Ellison, are questioning why it took Verizon so long – two whole years – to reimburse its customers and why a remedy didn’t arrive sooner.

Edited by Jaclyn Allard

TechZone360 Contributing Editor

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