Verizon Wireless to pay refunds for billing errors

NEW YORK Mon Oct 4, 2010 12:55am BST

A man looks at his phone as he walks past a Verizon wireless store in New York, July 30, 2009. REUTERS/Brendan McDermid

A man looks at his phone as he walks past a Verizon wireless store in New York, July 30, 2009.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - Verizon Wireless in a statement Sunday said it will pay millions of dollars in refunds to 15 million cell phone customers who were erroneously charged for data sessions or Internet use.

Verizon did not disclose how much exactly it would have to pay but said 15 million customers would receive credits or refund checks that in most cases would range from $2 to $6 but would go beyond this in some cases, on their October or November bills.

Former customers will get refund checks while existing customers will get credits.

A person familiar with the matter said the refunds would come to more than $50 million. If all 15 million customers receive $6 in refunds each this would come to $90 million.

The case marks a misstep in an area wireless service providers are dependent on for future growth.

Operators like Verizon Wireless have been heavily promoting ever more advanced phones in the hope of convincing consumers to go beyond making voice calls and to also spend money on data services such as web-browsing and downloading applications such as games.

The New York Times, which first reported the settlement, cited unnamed people familiar with the settlement plan saying that the US telecommunications regulator, the Federal Communications Commission is pressing Verizon to agree to a penalty for the unauthorized charges.

The charges affected customers who did not have data usage plans, but were billed because of exchanges initiated by software built into their phones.

For example, trying out a demonstration of a game that Verizon Wireless had pre-loaded onto a phone would sometimes trigger data transmissions from the phone unbeknownst to the customers who were then charged by Verizon Wireless for the data.

In the past three years, the U.S. Federal Communications Commission received complaints from Verizon Wireless customers who said they were charged for data usage or Web access, the New York Times reported Sunday.

(Reporting by Joseph A. Giannone and Sinead Carew; Editing by Diane Craft)

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