by Matthew L. Schafer
Note: This report originally appeared on the media blog Lippmann Would Roll.
On Sunday, Verizon Wireless reported that it will refund customers who were subject to various $1.99 data fees as a result of stock cell phone software, which used data unbeknown to the customer. According to a Verizon press release, most refunds will be between $2.00 to $6.00. While various estimates are floating around, the majority opinion estimates that the refund will cost Verizon upwards of $50 million.
“The majority of the data sessions involved minor data exchanges caused by software built into their phones,” Verizon said in a statement. “Others included accessing certain web links, which should not have incurred charges. We have addressed these issues to avoid unintended data charges in the future.”
The refund comes after a 10-month Federal Communications Commission’s investigation into what it called Verizon’s “mystery fees,” which affected over 15 million subscribers. The investigation follows closely on the heels of a May FCC investigation into “bill shock” or the unexplainable rise in cell phone bills. At the time of the bill shock survey, the CTIA, a lobbying association of wireless providers that includes Verizon Wireless, said the survey was off base.
“[The] survey completely disregards the evolution of the wireless marketplace,” the CTIA’s Christopher Gutman-McCabe said at the time.
The CTIA has yet to release a statement on Verizon’s refund and billing practices. Despite the CTIA’s silence, the FCC still has questions for Verizon about its handling of the situation.
“We’re gratified to see Verizon agree to finally repay its customers,” the FCC wrote. “But questions remain as to why it took Verizon two years to reimburse its customers and why greater disclosure… did not come much, much sooner.”
FCC Commission Mignon Clyburn also expressed doubts about Verizon’s actions. In a statement released on Monday, Commissioner Clyburn, a staunch consumer advocate, stated that the FCC cannot turn its back on consumer protection.
“The fifteen million overcharged consumers, identified by Verizon Wireless, deserve more than refunds,” Clyburn wrote. “They deserve answers and steps to assure that such errors will not happen again.”
As reported in July, the only legislation working its way through the United States Senate is a bill regarding cell phone billing procedures. The bill from Senator Amy Klobuchar [D-MN] would require a reduction in the costs of early termination fees based on the length of the contract before termination.