Verizon to Refund Millions in Mystery Data Plan Charges
Verizon Wireless has agreed to begin repaying subscribers millions of dollars in errant charges following an investigation by the Federal Communications Commission.
Over the next two months, the nation's leading wireless provider plans to alert roughly 15 million customers that they were hit with fees for mobile data sessions that they did not initiate, and will begin issuing credits to indemnify users for the mistaken charges.
For most users, that will mean a credit of between $2 and $6 applied to their accounts, though Verizon said that some customers will receive larger refunds. The company plans to mail checks to former subscribers.
All told, Verizon is expected to repay around $50 million in credits for charges for inadvertent mobile data sessions, many of which Verizon said stemmed from "minor data exchanges" associated with pre-installed software on users' phones.
"Verizon Wireless issues credits to customers from time to time based on regular review and monitoring," Mary Coyne, the carrier's deputy general counsel, said in a statement. "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."
But Verizon's move to reimburse subscribers comes amid a long-running probe at the FCC, which has been taking a hard look at several practices of the wireless industry.
"We can confirm reports of an FCC investigation into mystery fees that appeared on Verizon Wireless bills costing over 15 million Americans tens of millions of dollars," Michele Ellison, chief of the FCC's Enforcement Bureau, said in a statement.
The FCC has taken a particular interest in the billing practices of wireless providers, initiating a proceeding into what it describes as "bill shock," the unhappy experience of subscribers who are surprised to find hefty overage charges on their monthly bill.
At the FCC's meeting later this month, the agency is set to vote on a notice that would initiative the process of writing rules requiring wireless carriers to alert subscribers as they are approaching their monthly limits of minutes, text messages or data usage.
Last month, Sen. Tom Udall (D-N.M.) introduced a bill, the Cell Phone Bill Shock Act, that would require carriers to provide similar notices.
For CTIA, the principal trade association representing the wireless sector, the FCC's probe and Udall's legislation both invite the prospect of unwelcome government interference. The group claims that its members already have mechanisms for alerting subscribers about looming overages in place.
"While we appreciate the spirit with which the legislation is offered, we are concerned that this bill has the potential to cause customer confusion and frustration," CTIA said in a statement responding to Udall's bill. "We know those outcomes are not Senator Udall's objective," the group added, saying it hoped to work with the lawmaker to address its concerns of regulatory overreach.
The FCC's Ellison praised Verizon for agreeing to reimburse subscribers for the data overcharges, but signaled that the issue remains atop her bureau's agenda.
"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," she said. "The Enforcement Bureau will continue to explore these issues, including the possibility of additional penalties, to ensure that all companies prioritize the interests of consumers when billing problems occur."