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Why did Verizon Wireless overcharge 15 million customers before making things right?

It's no corporate mea culpa and hardly an apology. Verizon Wireless, the nation's largest cell phone service provider, released an "official statement" Sunday saying it will "apply credits" to customer accounts "due to mistaken past data charges."

Millions of mistaken charges, in fact, at $1.99 a pop.

Over several years, Verizon charged 15 million customers for data services (using the Internet on their cell phone) they did not use, nor apparently even signed up for. The company will refund those affected anywhere from $2 to $6, which translates to at least $30 million and as much as $90 million. Reports suggest $50 million is likely.

Now, Verizon is a behemoth company. Fifty million dollars is a balance sheet blip for a company with 91 million customers and $62 billion in revenue last year.

Even so, why did it take so long and so many affected users before Verizon acted responsibly?

Full disclosure.

My family is a Verizon Wireless customer, a solid contributor of more than $1,800 a year to the company's bottom line for three cell phone lines (including one texting-crazed son). None of us use the Internet over our cell phones since the Net is typically readily accessible elsewhere in our lives, and I see no reason to pour any more of my paycheck into Verizon's voracious maw.

But here's the bottom line. It is mobile Internet access — not talking or texting — that is the future gravy train for wireless companies like Verizon.

Consumer Reports on Monday came to Verizon's aid, noting that while the cell phone industry gets mediocre overall marks from customers, Verizon still ranks tops in service.

Is that being damned with faint praise?

I doubt some fancy Verizon ethics council sat around saying, "Gee, it seemed okay to gouge our customers for years for data services they never signed up for when only 14.9 million were charged. But 15 million? Maybe we should come clean."

The real motivation to issue refunds is the 10-month review of customer complaints by the Federal Communications Commission.

When Verizon issued its "official" statement on Sunday (a weekend release is often employed when issuing bad news) about reimbursing customers, the FCC issued its own release "confirming" its ongoing investigation into Verizon's charges. The FCC chose to call Verizon's charges "mystery fees" and hints it "may" yet impose penalties.

Which customers got charged?

Mostly ones with fat fingers who hit the wrong button on their cell phones that began opening up a mobile Web link they had never even requested on their phones.

If Verizon Wireless sustains any public relations damage from overcharging 15 million customers, it won't last. Other competing service providers, from AT&T to Sprint, have plenty of their own baggage.

Besides, wireless providers are about to fundamentally change the way they charge customers for cell phone service. Verizon recently announced it's moving away from all-you-can-eat data plans to systems in which people pay by the megabit. AT&T's doing the same thing.

Get ready for some seriously hefty wireless bills. Maybe the next Verizon Wireless ad campaign will ask: "Can we charge you now?"

Robert Trigaux can be reached at

Why did Verizon Wireless overcharge 15 million customers before making things right? 10/04/10 [Last modified: Monday, October 4, 2010 9:47pm]
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