Wednesday, October 16, 2013

Verizon Lied Repeatedly About That Bogus $2 "Data Fee"

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.

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:

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.

Read the rest of the discussion here...

Verizon Bogus Data Fee

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