Looking to head off FCC probe, Verizon will refund $90 million to subscribers
After meeting with Federal Communications Commission officials, Verizon Wireless officials told reporters the company will refund subscribers up to $90 million for improper charges over accidental Web access and data usage.
Verizon’s refunds will go out to some 15 million subscribers in $2 and $6 increments throughout October and November. Their announcement comes amid an FCC investigation into complaints of charges for unwanted services.
“The majority of the data sessions involved minor data exchanges caused by software built into their phones; others involved accessing the Web, which should not have incurred charges,” a Verizon attorney told Fox News. “We have addressed these issues to avoid unintended data charges in the future.”
Verizon had been charging customers $1.99-per-megabyte for data usage, even if they did not ask for a data plan. The company insisted most of the charges being refunded were due to software glitches.
“Customers who contacted Verizon about the charges said that the company had often refused to reverse the charges or discouraged them from blocking the data service on their phones,” The New York Times reported.
“We were gratified to see Verizon agree to finally repay its customers,” FCC enforcement Michele Ellison told The Washington Post. “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.”
In spite of Verizon’s damage control efforts, The Washington Post noted that its admission contradicts one of the company’s prior statements [PDF link] to the FCC, which assured officials they strive to eliminate accidental data charges.
Despite the company’s estimate of a pending $90 million in refunds, sources close to settlement talks between Verizon and the FCC estimated the company may end up paying only $50 million, the Times added.
Word of the FCC’s investigation, which has been ongoing since January, was first released to the public Monday of last week.
The refund will be one of the largest of all time by a telecommunications company.