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Verizon's $1.99 Phantom Fee Returns
This time covered by David Pogue at the NY Times
by Karl Bode 02:26PM Thursday Nov 12 2009
You might remember how during the summer, Teresa Dixon Murray at the Cleveland Plain Dealer did a great job highlighting a phantom $1.99 fee Verizon was hitting consumers with -- even if they didn't use any data. The phantom charges were being incurred when phones were off, phone batteries were dead, Internet access was blocked, or the phones didn't have the necessary software to go online. Many of you at the time complained about the fee as well. If you remember, Verizon told the paper that the charges were "erroneous" and that users would be getting full refunds.

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Fast forward several months later, and David Pogue of the New York Times pens an article today exploring how users are still getting socked by the phantom fee. Pogue doesn't reference Murray's earlier investigation into the phantom fee, but he does take the story one step further by quoting a Verizon insider who claims Verizon's well aware of the scam, but refuses to do anything about it because of the millions in additional revenue it generates. Says the insider:
"The phone is designed in such a way that you can almost never avoid getting $1.99 charge on the bill. Around the OK button on a typical flip phone are the up, down, left, right arrows. If you open the flip and accidentally press the up arrow key, you see that the phone starts to connect to the web. So you hit END right away. Well, too late. You will be charged $1.99 for that 0.02 kilobytes of data. NOT COOL. I've had phones for years, and I sometimes do that mistake to this day, as I'm sure you have. Legal, yes; ethical, NO.

"Every month, the 87 million customers will accidentally hit that key a few times a month! That's over $300 million per month in data revenue off a simple mistake! Our marketing, billing, and technical departments are all aware of this. But they have failed to do anything about it—and why? Because if you get 87 million customers to pay $1.99, why stop this revenue? Customer Service might credit you if you call and complain, but this practice is just not right."
You can of course have all data blocked. However, hitting one of these buttons by accident results in a message that the service is blocked -- a message that uses 0.06 kilobytes of data resulting in -- wait for it -- a $1.99 fee. The insider, who says he thinks there's millions of people obvlivious to this fee, says Verizon's now training support to try and offer customers blocking alternatives should they call and complain. Billing accuracy has never been Verizon's strong suit, be it wireless or landline service. With the frequency of the phantom charges imposed by the carrier, you begin to wonder how "erroneous" they really are.

Pogue recently brought a lot of attention to the fact that wireless carriers were using intentionally long voicemail greetings in order to erode user minutes. Hopefully his latest column can bring the same kind of attention to Verizon's cash cow $1.99 fee.

107 comments .. click to read

Recommended comments

Displaced Ohioan
Denver, CO

2 recommendations

reply to Deft

Re: Whoop de doo!

said by Deft:

two measly dollars!!!! there goes my bank account!
$24 over the year.
$48 after 2 years.

So what dollar amount is acceptable for you to be stolen from before you complain about it?

For me, 1 cent is too much.
Whats smells like blue?

All noise, no signal.
Jamestown, NC

2 recommendations

Total BS

This is total BS, but his math is off. It can't possibly happen to 89 million customers, as a large percentage of those have data plans already.

Regardless, I agree with his conclusion that it's nothing but a money grab. There are two very simple ways to resolve this; give the first MB of usage for free or disable data usage and prompt the user to enable if they really want to browse the web.
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