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olePigeon · Oct 29, 2010, 10:33 AM

Post Tech - Verizon Wireless pays FCC $25M for years of false data charges

Assuming they defrauded only 5% of the user base, they would have collected over $6 billion in bogus fees over three years. They finally got caught, so they're forced to pay back $77 million.

Reminds me of Microsoft. After they run Netscape out of business and nearly every competitor in the 1990s into obscurity, their punishment was to give customers coupons to buy more Microsoft products.

How are these victories for the consumer?

Doofy · Oct 29, 2010, 10:59 AM

Why isn't there any justice?
And why aren't we fighting to make sure there is?

turtle777 · Oct 29, 2010, 11:51 AM

Assuming ?

What are the facts ?

-t

olePigeon · Oct 29, 2010, 12:16 PM

Originally Posted by turtle777

Assuming ?

What are the facts ?

Verizon charged $1.99 to people without data plans when the phones used data not intentionally activated by the user, or, charged $1.99 for data on services that were supposed to be free. For example, most phones have a button that takes you to an App store. You hit the button by accident, so you quickly quit out to go back to your home screen. You got charged $1.99. Some people were charged $1.99 for using the backup feature, which is supposed to be free.

They've been doing this for many years, but the problem was only relatively recently noticed by the FCC only 3 years ago.

It has taken them 2 years from the point of notice to issue a refund, all the while still charging the overage fees.

So at the very least they've collected over $300 million in overage fees since they caught the eye of the FCC, but they're only required to pay back $52 million, with a $25 million fee.

The $6 billion figure is if they defrauded all their customers, which quite frankly, seems very plausible.

Verizon's apology is meaningless, and so is the FCC's actions. How do you overlook $300 million in additional revenue? You don't. Verizon knew what they were doing, they gambled and won.

ort888 · Oct 29, 2010, 12:46 PM

Should have just let the free market work it out.

olePigeon · Oct 29, 2010, 01:23 PM

Originally Posted by ort888

Should have just let the free market work it out.

How would that work? AT&T was doing the same thing with iPhones. The only reason AT&T stopped was policing from the FCC, likewise with Verizon.

I didn't bring that up, but I think it's inevitable this becomes political.

ort888 · Oct 29, 2010, 01:28 PM

If you don't like how it works start your own multi-billion dollar telecom company.

olePigeon · Oct 29, 2010, 01:32 PM

Originally Posted by ort888

If you don't like how it works start your own multi-billion dollar telecom company.

I'll get right on that.

Laminar · Oct 29, 2010, 01:37 PM

Hahaha @ort

But seriously, I scour my Verizon bill each month and have had to call on a few occasions to get bogus stuff removed. It's worse because I have a touchscreen phone that's a POS and will occasionally load the online web in my pocket. We finally blocked all data to the phone, but I still found two copies of "Just Dance" in my ringtones recently.

Doc HM · Oct 29, 2010, 03:00 PM

Pah! Amateurs. Vodafone in the UK just got the government to write off a £6billion tax bill. Just about balancing out all the spending cuts that were making headline news that week.

Turns out the CEO of Vodafone was previously the head of UK customs and excise (IRS in the UK) and was the direct boss of the current head, who overruled his own investigative team in order to wipe Vodafones slate clean.

I for one welcome our new big business overlords.

turtle777 · Oct 29, 2010, 04:09 PM

Originally Posted by olePigeon

AT&T was doing the same thing with iPhones. The only reason AT&T stopped was policing from the FCC, likewise with Verizon.

When ? What ?

I have never had that issue with AT&T (2.5 years customer).

-t

l008com · Oct 29, 2010, 10:49 PM

Don't people check their bills before they pay them? If my bill is more than a dollar more than it was last month, I scour them both. All big companies try to rip you off. Thats what customer service means. Duh.

Spheric Harlot · Oct 30, 2010, 04:19 AM

All telecoms companies with more than a couple ten thousand customers are swine. It's inherent to the industry. There just doesn't appear to be any other way to do it.

ghporter · Oct 30, 2010, 07:32 AM

The FCC started looking into the issue after a lot of Verizon customers odd stuff on their bills, and Verizon did nothing about the complaints. It may not have been as much as 5% of their customer base that had ANY fraudulent charges, but any inappropriate charges are not acceptable. From my read of the situation (I don't have any more details than most people), it looks like the FCC is basing the fine and refunds on the number of documented cases of fraudulent billing.

The Godfather · Oct 30, 2010, 01:47 PM

Originally Posted by olePigeon

I'll get right on that.

With profits like that, your business loan wold be paid off in mere months.

/Loving my $30/month prepaid 3G service.

olePigeon · Oct 30, 2010, 02:06 PM

Originally Posted by ghporter

From my read of the situation (I don't have any more details than most people), it looks like the FCC is basing the fine and refunds on the number of documented cases of fraudulent billing.

Which is a win for Verizon. How many people didn't report the overages? I'm willing to bet a ton of the overages came from family plans where parents just blamed the kids for the $1.99 charge.

The fine should be bigger, even 10x bigger. The company knew there was a problem and just didn't do anything. The only reason they're doing something now is because the FCC caught them.

What the CEO really meant to say was, "We're sorry people got overcharged. We'll make sure we aren't caught next time."

ghporter · Oct 30, 2010, 03:14 PM

Originally Posted by olePigeon

Which is a win for Verizon. How many people didn't report the overages? I'm willing to bet a ton of the overages came from family plans where parents just blamed the kids for the $1.99 charge.

The fine should be bigger, even 10x bigger. The company knew there was a problem and just didn't do anything. The only reason they're doing something now is because the FCC caught them.

What the CEO really meant to say was, "We're sorry people got overcharged. We'll make sure we aren't caught next time."

I'm not disagreeing. I completely agree with your take on the CEO's statement too. But the FCC has always been more business oriented than consumer oriented, so I'm not surprised that they would not go farther in whacking Verizon.

On the other hand, I'll bet a lot of people are now scouring their bills all the time-and wishing they'd bothered a long time ago.

OAW · Nov 4, 2010, 03:08 PM

Don't cell phone companies rank near the bottom of the most hated industries along with cable and insurance companies?

OAW

olePigeon · Nov 4, 2010, 04:02 PM

Originally Posted by OAW

Don't cell phone companies rank near the bottom of the most hated industries along with cable and insurance companies?

Yeah, they're rated somewhere between Comcast and mortgage investment companies. Comcast is at the very bottom, they were awarded the Golden Poo award last year, beating out AIG and Bank of America.