Verizon Agrees to Pay Treasury $25 Million to Settle Mystery Fees - Broadcasting & Cable

Verizon Agrees to Pay Treasury $25 Million to Settle Mystery Fees

Penalty comes in addition to $52.8 million owed to customers
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Verizon
Wireless has agreed to refund $52.8 million to customers and pay a penalty of $25 million
to the U.S. Treasury to settle a ten-month FCC investigation into
overcharges on its bills, the FCC said Thursday.

That $25 million was the biggest such payment in FCC history according to the Enforcement Bureau.

FCC
Enforcement Bureau Chief Michele Ellison said she was "gratified" with
the company's cooperation and said it was "taking the high road" with
the settlement. "Today's settlement requires Verizon
Wireless to make meaningful business reforms, prevent future
overcharges, and provide consumers clear, easy-to-understand information
about their choices," she said in a statement.

The FCC
confirmed earlier this month
that it was investigating the company for
"mystery fees that appeared on Verizon Wireless bills costing over 15
million Americans tens of millions of dollars,"
Ellison said at the time.

Verizon had
already identified the over-$50 million in overcharges, saying it would
be applying credits to their accounts over "mistaken past data charges."

But the FCC
had said a penalty was still on the table--which turned out to be the
$25 million--and it was concerned that it had taken Verizon two years to
discover the problem.

Mary Coyne, Verizon Wireless Deputy General Counsel, has
said in announcing
the Verizon refunds that steps have been taken to prevent a repeat
performance, but suggested the refunds were hardly unique. "Verizon
Wireless issue credits to customers from time to time
based on regular review and monitoring," she said.  "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."

The FCC said
Thursday that the "erroneous fees" were triggered by data transfers
triggered automatically by games, failed attempts to access data when
there was insufficient network coverage, and third-party
transfers.

As part of
the settlement, Verizon has agreed to stop charging the fees,
immediately repay the 15 million customers, and improve its customer
service. It must also create a "data charge" task force
and submit periodic reports to the commission on the status of its
refund and its steps to insure compliance with the settlement. Verizon
customers, in addition to those covered by the estimated $52.8 million
refund, will also have the right to appeal their
absence from the repayment, meaning the refund is not capped.

The
investigation is part of the FCC's avowed emphasis on consumer issues,
including so-called "bill shock," or fees that come as a surprise to
customers.

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