Verizon Wireless paying $25 million to settle data fee probe
Verizon Wireless (NYSE:VZ) will pay $25 million to the U.S. Treasury to settle a Federal Communications Commission investigation into so-called "mystery fees" the operator charged subscribers over the last several years. According to the FCC, the payment--the largest in the agency's history--wraps up a 10-month investigation; in addition to the Treasury payment, Verizon Wireless will refund a minimum of $52.8 million to approximately 15 million subscribers and take action to ensure the mystery fees are no longer billed.
The FCC states the investigation focused on pay-as-you-go data fees, with Verizon Wireless charging $1.99 per megabyte to customers who do not subscribe to a data package or plan. The probe determined that roughly 15 million customers were or may have been overcharged for data usage between Nov. 2007 and the present. Verizon Wireless cites multiple causes for the charges, including unauthorized data transfers initiated automatically by applications, accessing certain websites designated as free (like Verizon's own mobile web homepage), failed data transfers outside of sufficient network coverage and unwanted data transfers initiated by third parties and impacting customers with content filters installed on their handsets.
Verizon Wireless said it has already begun issuing repayments--current customers will be notified in upcoming bills, and former subscribers will receive a letter and refund check in the mail. Most credits and refunds fall between $2 and $6, although some consumers will receive larger amounts. Verizon Wireless adds that roughly five out of every six subscribers are unaffected by the charges: "We have taken steps to ensure this does not happen in the future," the operator adds in a statement.
For more on the Verizon Wireless settlement:
- read this release