Verizon to pay $25M to U.S. to settle mystery mobile fees case

Verizon Wireless will pay $25 million to the U.S. government and will offer its mobile customers a tool to block their phones from Web access in a settlement with the U.S. Federal Communications Commission over unexpected fees on customers' bills.

Verizon will pair the $25 million payment, the largest voluntary settlement in the history of the FCC, with refunds of at least $52.8 million to about 15 million customers who paid the mystery fees, the FCC said. Verizon announced it would refund customers earlier this month.

Verizon charged customers without monthly data plans $1.99 per megabyte for data access in several circumstances, the FCC said. Customers were charged when they accidentally launched Web applications, when they accessed some Web pages that were supposed to be free, and when they made successful attempts to access data when there was insufficient network bandwidth, the FCC said in a press release.

"Today's consent decree sends a clear message to American consumers: The FCC has got your back," FCC Chairman Julius Genachowski said in a statement. "People shouldn't find mystery fees when they open their phone bills -- and they certainly shouldn't have to pay for services they didn't want and didn't use. In these rough economic times, every $1.99 counts."

A Verizon spokesman wasn't immediately available for comment.

In addition to the $25 million payment and the refunds, the settlement also requires Verizon to offer customers a tool that blocks their phones from accessing the Web. The settlement allows Verizon customers to appeal the company's decision if they do not receive refunds, and it requires Verizon to offer customers new explanations of pay-as-you-go plans.

Verizon must also establish a Data Charge Task Force, staffed by specially trained customer service experts focused on data charge complaints, the FCC said. The task force will make regular reports to the FCC.

The settlement resolves an investigation started in January by the FCC's Enforcement Bureau. The bureau launched an investigation after customer complaints and news reports about unexpected data charges.

"Today's settlement with Verizon Wireless is about making things right and putting consumers back in the driver's seat," Michele Ellison, chief of the Enforcement Bureau, said in a statement. "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."

Ellison said she appreciated Verizon's cooperation in the investigation and settlement.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is

Copyright © 2010 IDG Communications, Inc.

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