FCC pressures Verizon to refund $50 million in phantom charges

verizon refund for accidental internet access

After a 10-month FCC investigation, Verizon will refund $50 million to reimburse 15 million customers for data services they did not order. Image: CC Streb KR/Flickr

A Verizon refund of $50 million to 15 million Verizon customers was announced Sunday. After years of customer complaints, Verizon admitted it had repeatedly charged customers for data services they didn’t order. The Federal Communications Commission, which had been investigating Verizon’s phantom charges for 10 months, said questions still remained about why Verizon took so long to admit the billing errors and offer reimbursement.

The Verizon refund for phantom charges

The Verizon refund is the result of an FCC investigation that determined customers were erroneously billed in two ways. According to the Los Angeles Times, most were billed a $1.99 monthly fee for data service they did not order. Some customers who tried a free demo of an app were hit with the fee. Others were dinged for accessing the Internet by hitting a button by mistake and then canceling immediately. Verizon customers eligible for refunds will be notified in October and November. Most will get refunds of $2 to $6. Current customers will get credit on their accounts. Ex-Verizon customers will be mailed checks.

FCC forces Verizon to address customer complaints

The Verizon refund story began in 2009 when the New York Times and other news organizations reported that customers had complained about the fees but were being ignored by Verizon. The Times reports that at the time Verizon denied that it was billing customers for accidental use or free demos. The FCC launched an investigation in January. Recently Verizon and the FCC have been at odds over how long the company had been aware of the erroneous charges. Under pressure, Verizon submitted to a “consent decree,” in which the company makes a voluntary payment to settle the issue. In a statement, Michele Ellison, chief of the FCC enforcement bureau, said getting consumers their money back is the first step. Making sure it doesn’t happen again is next.

Protecting consumers with bill-shock regulation

Verizon and other wireless carriers are scheming for new revenue streams in the weak economy as higher monthly service fees and rising contract cancellation penalties are making U.S. consumers keep old cellphones longer. The Washington Post reports that the FCC is launching an initiative to protect consumers from surprise fees. Proposed “bill-shock” regulation would require wireless carriers to alert customers via text message of sudden increases in their monthly charges. The Wireless Association is lobbying heavily to kill bill-shock regulation, which will be a hot topic at the FCC’s October meetings.

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