Verizon Wireless Settles with FCC, Refunding 15M Customers
Verizon Wireless announced over the weekend that it will issue a $90 million refund to 15 million of its users for wrongly charging in data access or internet sessions. The refund is a result of a settlement with the Federal Communications Commission. This is far by the largest customer refund by a telecommunications company.
To prevent the FCC from releasing a Notice of Apparent Liability, the company and the FCC entered into a consent that Verizon would neither deny nor admit the charges provided that the company will give a voluntary refund. The amount settled is said to be about $50 million.
According to a report, Verizon Wireless charges $1.99 to customers who did not have data access plans. The data access is actually enabled by built-in software in cellphones that initiates data exchange, and some of Verizon’s flip phones have a directional arrow that, when pushed, launches the web browser and automatically charges the user $1.99 — even if shut immediately. The agency was “gratified to see the repayment, but for millions of Americans it’s a day late and a $1.99 short,” said chief of FCC enforcement bureau Michele Ellison. Customers are expected to receive a credit of $2 to $6 on their October or November bills, or refund check in the case of previous customers.
The FCC had been receiving complaints from customers against Verizon over the past three years. Reports from the likes of the The New York Times and The Plain Dealer of Cleveland said that Verizon had been ignoring complaints of customers, and that the company refused to reverse the charges, and discouraged users from blocking the data service on their phones.
December of 2009, Verizon told FCC that the company did not charge those who end a session immediately. This raised questions on Verizon’s tactics, as the mobile provider’s statement was eventually proven false. When it comes to customer relations, Verizon hasa stadard to uphold, and taking advantage of consumers is something mobile providers are known for.
During a time when mobile devices are outpacing PCs, connectivity is a service many are willing to pay for. The business of web access and data transfer carries several implications for the enterprise and consumers, as the matter of net neutrality and other data pricing models are apt to be reviewed and modified to meet the new demands for connected communications.
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