Verizon Wireless agreed to pay $25 million to the Federal Communications Commission -- a record, according to the agency -- to settle complaints the phone giant was charging "mystery fees" to consumers' phone bills over the last several years.
The fine is in addition to the $52.8 million Verizon already agreed to refund to 15 million of its customers. As part of the settlement, the company will have to give customers the option to block all data services on their cell phones.
Most of the charges were assessed when customers without data plans inadvertently accessed the Internet or other data services from their cell phones, triggering a $1.99 charge, the FCC said. Verizon also charged customers to access some Web links it had said were free, according to the settlement. Other charges were sparked by mobile games that accessed the Internet and by third-party phone content filters that accessed the Web without the customer's consent. Verizon in some cases also charged for unsuccessful attempts to access data, the agency said.
"Today's settlement is about making things right and putting consumers back in the driver's seat," said Michele Ellison, chief of the FCC's enforcement bureau in a statement. "Today's settlement requires Verizon Wireless to make meaningful business reforms, prevent future overcharges, and provide consumers clear, easy-to-understand information about their choices."
Verizon Wireless in a statement of its own today called the charges "inadvertent billing mistakes."
"Verizon Wireless works very hard to simplify the wireless experience for customers and to ensure that customer bills are accurate," the statement said. "Nonetheless, internal billing processes can be complex and, in this case, we made inadvertent billing mistakes."
"We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills," the statement said.
Verizon said most of the charges occurred when software loaded on phones sent a small data "acknowledgment," generating a $1.99 charge for customers who otherwise had no data service.
FCC Chairman Julius Genachowski said the settlement "sends a clear message to American consumers: The FCC has got your back."
"People shouldn't find mystery fees when they open their phone bills -- and they certainly shouldn't have to pay for services they didn't want and didn't use."
The FCC said Verizon may actually have to refund more money if evidence turns up that additional customers were mistakenly billed.
Besides offering customers a choice of turning off all use of data, Verizon agreed to offer its customers better customer service as part of the settlement.
Introduction to Value Investing
Are you the next Warren Buffett?View Course »