FCC Investigates $50M Worth of Bogus Phone Charges

Dennis Faas's picture

Verizon will issue refunds to around 15 million customers after mistakenly charging them for non-existent data use. But the company may wind up paying a bigger price for the error.

Phone Users Victims of 'Technical Errors' in Billing

In a statement attributed to deputy chief counsel Mary Coyne, the company said the mistaken bills were issued over the past several years. It said the customers did not have data plans, but were victims of technical errors, either with phone software sending and receiving "minor" data, or being billed for following web links that shouldn't have incurred data charges. (Source: vzw.com)

The customers will have been billed at $1.99 per megabyte, the standard Verizon rate for data use among customers not on data plans. It appears many, if not most of the incidents will have included less than a megabyte, thus incurring a minimum $1.99 charge.

$50M in Refunds to be Issued as Credit

According to Verizon, most of the affected customers paid a total of $2 to $6, though some racked up larger charges.

The refunds will be issued as credit against bills for current customers and as refund checks for those who are now former charges. That would total between $30 million and $90 million in refunds, though Verizon is reported to be estimating the figure at around $50 million.

The refund looks to be a response to pressure from the Federal Communications Commission (FCC), which has been formally investigating complaints since the beginning of the year. That followed media pressure dating back at least a year prior.

There's no guarantee the refunds will end the issue. The FCC could bring formal charges against Verizon under its legal regulatory system, which could result in further financial penalties.

Cause of Mistake Unknown

It's notable that Verizon hasn't detailed exactly what caused the mistaken billing, though it does say the problem has been rectified.

Previous reports said some phone models had directional buttons that automatically opened web pages when pressed, even accidentally. At the time, Verizon denied customers would be charged in such circumstances. It said customers who only accessed the Verizon home page (the default start page on the phones) and went no further would not incur charges. (Source: arstechnica.com)

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