Verizon Wireless To Refund $90M In False ChargesVerizon Wireless To Refund $90M In False Charges

The Federal Communications Commission was investigating complaints from Verizon Wireless customers over what appeared to be falsely applied data charges. Verizon announced, in an apparent move to head-off a lawsuit, that it will refund customers who were over charged.

The problem unfolded over a number of years, and applied mostly to feature phones (normal phones with no smartphone data plan requirement). Verizon Wireless charges $1.99 per megabyte of data for customers who don't purchase a data plan. Up to 15 million Verizon customers inadvertently initiated a data session on their devices, and were subsequently hit with charges at the $1.99 rate.

Verizon claims a software bug led to the problem. Part of the issue is how Verizon pre-programs its devices. Many of them have a shortcut built into the phone's physical keys that launches the browser. Users who accidentally press the wrong key could launch the Web browser and end up being charged, even if they cancelled out the data session.

Verizon explained in a statement, "As we reviewed customer accounts, we discovered that over the past several years approximately 15 million customers who did not have data plans were billed for data sessions on their phones that they did not initiate. These customers would normally have been billed at the standard rate of $1.99 per megabyte for any data they chose to access from their phones. The majority of the data sessions involved minor data exchanges caused by software built into their phones; others included accessing certain web links, which should not have incurred charges. We have addressed these issues to avoid unintended data charges in the future."

Verizon says that it will offer refunds between $2 and $6 to customers who were overcharged. The company will begin to notify customers later this month about the particulars of the refund. Verizon refused to qualify the exact amount of the total payout to customers.

The company said, "Verizon Wireless issues credits to customers from time to time based on regular review and monitoring. When we identify errors, we remedy them as quickly as possible. Our goal is to maintain our customers’ trust and ensure they receive the best experience possible."

The FCC later issued its own response:

“Consumer protection is at the core of the Commission’s public interest mission, and ensuring that consumers are treated fairly and reasonably is critically important to me. Given the magnitude of the problem that Verizon Wireless revealed yesterday, we must quickly get to the heart of what happened, when, and why. I applaud the Enforcement Bureau for acting swiftly to initiate an investigation into the widespread complaints that Verizon Wireless had engaged in significant overbilling for data services when the Bureau first learned of the phantom fees.

While I appreciate that Verizon Wireless has acknowledged its billing errors, the refunds to millions of Americans have been a long time coming. It appears the company was first notified, more than two years ago, about certain billing errors. As I pointed out in December of last year, the company’s initial response to public reports of the phantom fees was that it does not charge consumers for accidental launching of the web browser. Yesterday’s announcement clearly requires further explanation. I expect the company will continue to cooperate fully with the Commission and I look forward to the results of the investigation. The fifteen million overcharged consumers, identified by Verizon Wireless, deserve more than refunds. They deserve answers and steps to assure that such errors will not happen again. We cannot and should not let them down."