Verizon Wireless to refund $52.8m for ‘mystery fees’

By Todd Shields
Bloomberg News / October 29, 2010

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WASHINGTON — Verizon Wireless agreed to pay a record $25 million to the United States and refund at least $52.8 million to customers, ending an investigation into mystery fees charged to consumers, federal regulators said.

The payment is the largest in a settlement by the Federal Communications Commission, the agency said yesterday in an e-mail statement. About 15 million customers will get refunds and Verizon Wireless, the biggest US mobile-phone company, will ensure the fees do not recur.

“People shouldn’t find mystery fees when they open their phone bills,’’ FCC chairman Julius Genachowski said. “They certainly shouldn’t have to pay for services they didn’t want and didn’t use.’

At issue were overcharges for data usage during the past three years, the agency said. The FCC started an investigation in January after customers complained of charges for data services they did not initiate.

The FCC is investigating other complaints as well, Genachowski said in an Oct. 13 speech, and the agency in an Oct. 12 fact sheet distributed by e-mail said it was looking into practices at other mobile providers.’’

Verizon Wireless “made inadvertent billing mistakes,’’ Tom Pica, a company spokesman, wrote in an e-mail message. “We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills.’’

The company is owned by Verizon Communications Inc. and Vodafone Group.

The FCC said the voluntary agreement is part of a campaign to improve consumer protections. On Oct. 14, the agency started writing regulations aimed at helping mobile-phone users avoid bill shocks, or sudden and unexpected increases in their monthly bills.

The rules may require companies led by Verizon and AT&T Inc. to give subscribers notice when they near the monthly limits on their service plan.

Mobile phone companies said rules are not needed because companies give customers ways to track use of data, voice, and text features.

Verizon Wireless on Oct. 3 said it would pay refunds to 15 million customers in the next two months as compensation for incorrect billing. Most of the refunds will be $2 to $6.

The FCC said the erroneous fees were triggered by data transfers initiated automatically by applications built into the phone, such as games; accessing Web links designated as free, including the Verizon Wireless Mobile Web home page; and unsuccessful attempts to access data when network coverage was insufficient to complete a connection.