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Verizon Lied Repeatedly About That Bogus $2 'Data Fee'
FCC Failed to Do Job in 2010 Over-Billing Settlement
by Karl Bode 12:23PM Tuesday Jul 02 2013
Back in 2010 you might recall that Verizon was busted for over-billing the company's wireless users via a $2 "data fee." The over-billing, first exposed by Teresa Dixon Murray at the Cleveland Plain Dealer, occurred whether or not users had consumed data -- and even impacted some people whose phones had been off entirely.

The bogus fee slowly began to gain attention from larger media outlets, the NY Times ultimately quoting a Verizon insider who claimed the company knew full well they were screwing customers over -- but simply chose to do nothing about it. In fact, Verizon for several years denied the over-billing was even happening, before finally admitting error and settling with the FCC to the tune of $52 million in late 2010.

Click for full size
As I noted at the time, Verizon got off rather easy with that settlement, considering that some fifteen million customers had been charged at least $2 or more every month for several years -- math that leads to a grand total far higher than the $52 million settlement.

The law firm of Smithwick & Belendiuk thought the same thing, and after filing a FOIA request now claims they have Verizon internal documents showing that Verizon not only dramatically under-settled and lied repeatedly about the bogus charges, but that the FCC knew full well Verizon's estimates were bogus.

In a petition for investigation (pdf) filed with the FCC, the firm explains the documents show Verizon knew full well they had been massively over-charging customers but lied repeatedly about it to the press and FCC in order to keep raking in the dough. The documents also show that Verizon gleaned nearly $300 million from 2007-2010 thanks to the erroneous fee, and that Verizon executives even shot down attempts to lessen the bogus fee's impact:
quote:
Internal emails obtained as part of the FOIA settlement reveal that after press reports brought the phony charges to the attention of the public in mid-2009 Verizon Wireless began looking for a fix at the highest corporate levels. Verizon Wireless’s internal analysis recommended a 300kb monthly data allowance to customers as a means of mitigating the erroneous charges, but Verizon Wireless would be "forfeiting" about $10 million a month in revenues, so the 300kb monthly allowance was never instituted. Instead, in September 2009 the company implemented.
The firm also says they've found that the FCC's enforcement bureau couldn't be bothered to audit any of the numbers Verizon presented, and willfully accepted intentionally inaccurate estimates as fact, despite having data in their possession proving otherwise. Smithwick & Belendiuk are urging the FCC to investigate the matter and their own culpability. While you shouldn't hold your breath for that, it might be wise to keep in mind how many times Verizon denied this overbilling was even happening the next time the company opens its mouth.

Update: The NY Times has since run a story on this, in which Belendiuk claims he's pursuing this for precedent and out of a general interest in the case, not for any specific financial gain.

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JimThePCGuy
Formerly known as schja01.
Premium,MVM
join:2000-04-27
Morton Grove, IL

I am appalled

How could something like this happen?
What next? Verizon is discovered feeding private information to the NSA?
Boy am I glad I chose an "honest" provider.
I have ATT.

Chris 313
Come get some
Premium
join:2004-07-18
Houma, LA
kudos:1

Re: I am appalled

Are you kidding? It's just this week's episode of "How the Megacorp can screw the customer?"

elios

join:2005-11-15
Springfield, MO

Re: I am appalled

well AT&T is at lest up front about screwing you

dillyhammer
START me up
Premium
join:2010-01-09
Scarborough, ON
kudos:10
Reviews:
·WIND Mobile
·Start Communicat..

Re: I am appalled

said by elios:

well AT&T is at lest up front about screwing you

Just because they're looking at you while they're giving it to you doesn't make it any less appalling.

The problem isn't AT&T. They're just doing what any western telecom company does. Lie, cheat, steal. It's their MO.

The problem is the FCC. In our case up here in Canada, the CRTC.

Different name. Same douche-baggery.

Mike
--
I've picked on Cogeco long enough. Who's next? Any volunteers?
pawpaw

join:2004-05-05
Greenville, SC
said by elios:

well AT&T is at lest up front about screwing you

Did they tell you they are HIV+? I don't think you are getting the full picture.

mikesterr

join:2008-04-18
Atco, NJ
Im not much of a Conspiracy theorist but this one in my mind completely wreaks of it. I believe the 2 things may be related. Verizon wanted easy way out of this "Billing Problem" they had so they gave up the NSA data no problems and said.. Hey we will keep quite about all this Spying and stuff you have been doing but we would like to make this go away quietly and keep most of the money we made doing it. I don't put anything past anyone.
posthaste

join:2001-05-20
Champaign, IL
Corporations can engage in an orgy of customer screwing because the government has their collective back.

In fact, this is chicken feed compared to Wall Street's takeover of Washington.

»en.wikipedia.org/wiki/Regulatory_capture
--

rebus9

join:2002-03-26
Tampa Bay
Reviews:
·Verizon FiOS
·Bright House
said by JimThePCGuy:

Boy am I glad I chose an "honest" provider.
I have ATT.



Never forget, the "A" in AT&T stands for anti-christ. They were evil at the deepest levels long before the GTE/BellAtlantic merger that created Verizon.
mwf

join:2000-11-26
Granite Quarry, NC

$2 is the least of the overcharging

Considering it was a $2 minimum, just accidentally hitting the web browser on your phone without a data plan cost $2. We finally had to have Verizon block ALL data from our kids phones. We've been quite happy with T-Mobile for over a year now.
desarollo

join:2011-10-01
Monroe, MI

1 recommendation

Re: $2 is the least of the overcharging

Except when I did that, it brought up a screen that says "you need to have a data package on your plan" ... and they charged for the data to tell me that I didn't have a data plan.

As good as Verizon is, after programming the buttons on our phones that all triggered data use and $2 a month whenever someone accidentally pressed one trying to get to the home button, I figure Verizon was interested in just being scummy in their attempts to charge for data.

It should be telling to Verizon that I'm willing to endure sub-par cellular service in order to avoid them.

firephoto
We the people
Premium
join:2003-03-18
Brewster, WA
said by mwf:

Considering it was a $2 minimum, just accidentally hitting the web browser on your phone without a data plan cost $2. We finally had to have Verizon block ALL data from our kids phones. We've been quite happy with T-Mobile for over a year now.

And don't forget this is from providers who have phones made that have cost incuring features tired to buttons that stick up more than others, data consumed when the big obvious button in the middle is pushed at a time other than to select what is on the screen to do, every button except call and end and the number pad activating an extra feature.

Thankfully we just have smartphones mostly now so they can just sell off your analytic date of consumerism to the highest bidder, show you some adverts, all for a low monthly cost of nearly $100 a month.

They made the cash cow more virtual and less physical.
--
Say no to astroturfing. actions > Ignore Author

MR DROT

@optonline.net

Verizon thievery

When we have a system where the regulated control the regulators, this is type of result that occurs. Imagine that bank robbers could negotiate with the prosecutors over what small percent of the stolen money should be returned!

The FCC has outlived its usefulness and its only thru the efforts of people like Arthur Belendiuk that these dirty practices come to light and the criminals are called to some measure of accunt.
Cogdis

join:2007-03-26
Floral Park, NY

This is not the end.

This isn't the last time something like this will happen. There's no oversight on anything relating to data so the door is wide open.

Here's a funny story that wouldn't be so funny if it cost me money:
I have several lines of service on Sprint so they still have unlimited data. One of these lines is a smartphone that averages LESS THAN one half GB monthly data usage. Last month the user of that line went to Mexico for most of the month and left his phone behind so I expected the data usage to be miniscule for the month. Instead I saw this on the bill "Sprint 3G Data Unlimited 18,392,560" This is a phone that can't tether, the user doesn't stream video, music or download apps and the phone was off for most of the month.

That's one heck of a glitch that would have cost a lot of money if Sprint charged by the byte!
cramer
Premium
join:2007-04-10
Raleigh, NC
kudos:9

Re: This is not the end.

What is it on other months? Billing isn't remotely real-time, so you could be looking at data from some time before the phone was "off". (or somebody else was using it while he was away)
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

easy answer

prepaid... ZERO below the line fees-- even Verizon can't fight this trend towards consumers not wanting to get ripped off...

eventually this market will hit critical mass and that's the ONLY way the consumer market will function.. pay upfront with NO contract, NO subsidy and the handset makers have to face the market forces on what to charge for phones, and by extension so do the carriers.

CrazyFingers

join:2003-10-01
Columbia, MO

Re: easy answer

The simple solution to that:
Congress today declared all pre-paid cellular plans illegal, citing repeated use by drug cartels, Al-Qaeda, and pedophiles as reasons for passing the "Fighting Unlawful Cellular Knowledge & Youth Online Usage" act.
Major carriers, including Verizon and AT&T announced new pricing structures intended to replace "these criminal and dangerous pre-paid plans".
--
Burrow owl...burrow owl...

Rambo76098

join:2003-02-21
Columbus, OH

Re: easy answer

Because... Think of the children!
tmc8080

join:2004-04-24
Brooklyn, NY
I like this motto: if it's too high.. don't buy..
I got along quite well without a cell phone throughout most of the '90s and 2000s..

Outraged

@optonline.net

Legislative & Regulatory Capture = CORRUPTION

This is Egregious Banditry on the part of Verizon because of the influence, money and lobbying power they have over the FCC. It has become completely acceptable to Congress that industry controls regulators to this level and gets away with not even a slap on the wrist while holding millions of consumers hostage and over-charging them at will and providing misleading information. It bodes peril for this country's middle class which is fast becoming extinct. The FCC's criminal neglect of Verizon's actions is an insult and a slap on the face of tax-paying citizens of this country.

meeeeeeeeee

join:2003-07-13
Newburgh, NY

Smithwick & Belendiuk

Prepare to meet the IRS.
Stumbles

join:2002-12-17
Port Saint Lucie, FL
Reviews:
·AT&T U-Verse

Really?

Verizon lied with the mindset they could careless while intentionally screwing their customers and the FCC has dirty hands?

That's hardly a surprise but at least now there is documentation. Not that anything will change. Such things will simply find a new dark corner to hide until discovered again, move to a different dark corner; rinse and repeat.

Probitas

@teksavvy.com

Class Action

Take them both to court. You can now prove damages and might be able to prove collusion/conspiracy.

cork1958
Cork
Premium
join:2000-02-26

I agree

I totally agree with just about every dang post here!!

Verizon, AT&T, the cable company's, etc., are all out for that last ungodly dollar, no matter the cost or consequences!

They are no less dishonest than our very own government though!
--
The Firefox alternative.
»www.mozilla.org/projects/seamonkey/

JohnILM
Mayhem til the AM
Premium
join:2003-03-15
Tuckahoe, NY

$52M dollar fine for something that generated ~$360M a year

seams totally fair

Probitas

@teksavvy.com

RICO

This could be an option as well. While they may be a business, the RICO act could apply as certainly there was crime committed on massive scale to defaud customers, and this would also bring the hammer down on the CEO's and FCC puppets, as they could be held culpable for aiding and abetting, if it can be proven they knew and did nothing due to a financial incentive. Certainly Verizon heads would roll, as could some at the FCC. I wouldn't feel sympathetic to a 90 year old retired CEO if at some point he profited and awarded himself huge salaries for retirement because of this, I'd let him die in the prison. Serves 'em right.

CableConvert
Premium
join:2003-12-05
Atlanta, GA

From the company that pays no taxes

...or better yet pays a negative Federal tax rate (we give them money back)
jasontaylor

join:2010-11-17
Kensington, MD

Happy anniversary!

Posted on the 123rd anniversary of the Sherman Antitrust Act which completely eliminated corporate monopolies and corruption. How fitting. I do agree with the poster about taking the matter to court. That's the *only* way to prevent corps. from stealing.

»twitter.com/jasontaylor7

xpbx
220, 221, Whatever It Takes.
Premium
join:2000-11-08

just more broken promises

from the company that brought you broken promises in the first place. thanks lowell et al

Garst

@rr.com

Verizon Executives Need to Face Felony Charges

What Verizon did is fraud! Its executive need to be arrested and have their sorry [butts] thrown in jail for the maximum sentence!