Verizon Wireless to Pay Fine and Give Refunds for Overbilling Customers
October 28, 2010. The Federal Communications Commission's (FCC) Enforcement Bureau (EB) adopted and released an Order [PDF] and Consent Decree [9 pages in PDF] regarding Verizon Wireless's billing practices with respect to data usage.
The Consent Decree states that "Verizon Wireless shall distribute to the approximately 15 million Affected Customers credits or refunds totaling approximately $52.8 million". It also requires Verizon Wireless to pay a fine (nominally a "voluntary contribution") of $25 Million.
FCC Commissioner Mignon Clyburn (at left) stated in a release that "This month, the FCC has taken actions that send an important message about how seriously this agency takes its public interest obligation to protect consumers. In both the Bill Shock Notice of Proposed Rulemaking, which we adopted on October 14, and today’s Consent Decree with Verizon Wireless, the Commission’s initial examination demonstrated that voluntary steps to resolve the issues that wireless consumers identified in their complaints were insufficient and warranted further inquiry."
The FCC adopted and released this Notice of Proposed Rulemaking (NPRM) [32 pages in PDF] at its October 14, 2010, open meeting. See, story titled "FCC Adopts Bill Shock NPRM" in TLJ Daily E-Mail Alert No. 2,142, October 19, 2010.
The Consent Decree also requires Verizon Wireless to better train and supervise its employees, to create a "Data Charge Task Force", to provide customers "plain-language description" of its data charges, and to provide periodic compliance reports to the FCC.
Chris Riley of the Free Press stated in a release that "resolution of this action does not correct the fundamental problems that plague the wireless industry. Only in Washington can a company secretly fleece its own customers for years, get caught, initially deny the behavior, and then settle for a modest sum."
He continued that "These phantom fees should never have been levied in the first place
-- and they could have been prevented by pro-consumer rules protecting against bill shock and
ensuring transparency in billing practices. Importantly, Verizon would not have been willing
to settle were the Commission not poised to pass rules against such practices. Threats of
regulation have a very short shelf life if not consummated. If the FCC does not move forward
on its pending proceedings on bill shock and truth-in-billing to establish common-sense rules
of the road to protect consumers and prevent deception, the abuses of the past will recur, and
consumers will be no better off in the long run."