Verizon To Keep Charging Controversial Fee Despite $100 Million Settlement

Verizon has agreed to pay $100 million to settle a class-action lawsuit over its monthly "Administrative and Telco Recovery Charge." The telecom giant will distribute the funds to customers who submit claims, with individuals receiving up to $100 each. Though admitting no wrongdoing, Verizon said it "continues to deny that it did anything wrong." The company defended its right to impose the charge, which was recently raised from $1.95 to $3.30 per month per line, and warned it may increase the fee again in the future. Settlement emails are still going out to eligible customers, who have until April 15 to file.

Obviously

[wakeboarder]

The settlement wasn't enough, charge then again

Re:

[Randseed]

The settlement wasn't enough, charge then again

Agreed. In a sane legal system agreeing to a $100M payout would imply that you're admitting wrongdoing. The shareholders should be livid.

Re:Obviously

[NFN_NLN]

The firm has seen strong growth in connections in recent years, reporting over 143 million wireless retail connections in 2022, alongside almost 9 million fixed broadband connections. In addition, Verizon has been ranked as the most valuable telecom brand worldwide.

At $3 per customer they bring in $429M but pay out $100M. The shareholders are happy.
It's the customers that should be pissed.

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[Anonymous Coward]

Governments need to enforce more meaningful punishments to avoid scenarios like this.

Re:

[Xenx]

Not defending Verizon, but there are other reasons than guilt that a company would settle. One being the cost of litigation. The other being potential disclosure of secrets, documents, etc. And to be clear, that doesn't mean the company is necessarily trying to hide something nefarious. It could just be future plans for expansion, or the like. If the class-action cared enough about proving the fees were wrong, they could have opted to go forward and not settle.

Re:

[alvinrod]

Not necessarily. If Verizon could present an argument that the combined costs of litigation plus what the expected cost of a loss (even if improbable) would exceed a $100 million settlement, then the shareholders should be in favor of management pursuing that course of action.

There are likely people who will plead guilty to something as part of a deal created by prosecutors even though they are innocent of any wrong doing, simply because the possibility exists that they could be convicted of the crime in

Re:

[Rockoon]

if A times B times C is less than X, we dont do a recall

Re: Obviously

[Slashythenkilly]

love a good fight club reference...lol

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[Hodr]

Google says they have 143M wireless customers. If they charge them $3.30 a month then this settlement cost them......6 days of having this surcharge. Sounds like a win, they can get sued for a similar amount 4 times a month every month forever and still come out ahead.

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[noodler]

It looks like you don't understand the legalities concerning settlements. It is not the same as losing a court case.

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[wakeboarder]

I don't, please explain

Why is this legal?? + profit margins are 60%!

[Somervillain]

People need to get outraged by things like this. If you require me to pay it (not an optional add-on) and it's not strictly regulated, like a tax, they it should be reflected in all advertisements. This is shitty and sleazy and they're going to keep doing it and hire lobbyists to ensure they can keep doing it. Verizon reported a quarterly gross profit margin of 59.69%.

In my state, Comcast wanted to introduce strict usage quotas....my state senator threatened regulation and oversight and they canceled their plan at the last minute. Everyone who hates gov regulation?...this is what you get without oversight....hidden, arbitrary, unadvertised mandatory fees.

Re:Why is this legal?? + profit margins are 60%!

[jacks smirking reven]

Google was trying to break in on residential internet access and they ran into problems with pole access and local jurisdictions as well as the local telco monopoly already (which is a whole different can of worms).

The issue with residential internet is that like your power and water it is a Natural Monopoly [wikipedia.org] and our failure to accept that fact has led to those problems.

Even now I can see the wireless connectivity drifting towards that direction. Yes a company like Google can set up more towers and more antennas and try to compete with the Big 3 in the USA but to what end and what point? There is only so much frequency around and to waste it just for this illusion of "free market competition" is starting to seem a bit silly. Could a company not the size of Google ever have a chance to compete with Verizon/ATT/T-Mobile?

Just regulate the industry is the simplest solution and I agree with OP, if a fee is mandatory then it should be reflected in all advertised prices. Anything less is deception.

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[dryeo]

Here in Canada, we're perpetually stuck with 3 telcos. Every time there's a 4th one, they get bought out by one of the 3. Some regions do have more, and lower prices.
At least this shit is illegal, you pay so much plus tax and maybe as a separate line charge, X amount for equipment, usually cost spread over 2 years, which I think is the legal limit for contracts. Some Provinces also have a 911 surcharge, used to be 75 cents here before it went away.
Of course prices still go up regularly, usually the 3 telcos

Re:Why is this legal?? + profit margins are 60%!

[zuckie13]

It's legal because we (the collective across the U.S. we) don't vote for enough of the type of politicians willing to make it not legal. That means we get this.

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[fahrbot-bot]

It's legal because we (the collective across the U.S. we) don't vote for enough of the type of politicians willing to make it not legal. That means we get this.

And thus ...

The government you elect is the government you deserve.
-- Thomas Jefferson

(Remember that this November.)

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[LazarusQLong]

regrettably, most Americans a) wouldn't even be thinking about this come November, and b) think the problem isn't 'their' politicians but are some in 'The Other Party' that do this crap. It seems most Americans are unable or unwilling to actually LOOK at the data about who voted for which law and then vote accordingly. Instead they trust whichever talking head on the tv tells them whatever platitudes make them feel good, without regard for that politician's actual voting record.

Sonny Bono, when he was a

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[CWCheese]

I worked for telecom firms for several decades and saw the FCC routinely granting authorization for the many myriad fees that the Big 3 and everyone else added to the bill. Telco Recovery Charge used to be called Bill Service Fee and was pitched to FCC as necessary to pay for maintenance of the automation infrastructure, e.g. the computers and data centers. The name was changed because customers grew upset knowing they were being charged to print a bill for mailing, and then were still being charged when th

Ticketmaster too

[Powercntrl]

Ticketmaster also got in trouble for their bullshit fees, which are still a thing.

Vote with your pocketbook

[The-Ixian]

Obviously, Verizon is going to keep doing what they are doing unless people start moving their business elsewhere.

There is a lot of competition in the mobile telephone service provider space.

I don't really understand why people pay huge monthly premiums for a phone contract when you can go pre-paid for so much less.

Nothing changes

[NotEmmanuelGoldstein]

... never adequately or honestly disclosed to customers ...

So, corporation is fined for dishonesty (and thus, legally an act of fraud) but since corporate dishonesty is legal in the USA, nothing will change.

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[dryeo]

No, they settled while claiming to be innocent, thus avoiding being found guilty of fraud in a civil case.

despite = encouraged

[elcor]

100M is 0.1% of their revenue so this is in fact the law saying "well done, carry on"

Re:

[LazarusQLong]

... because the great majority of our elected officials know that their campaign requires cash to get re-elected, and that corporations have no limit on the amount that they can 'donate' to a politician's 'campaign'.

That's corporate land by the GOP

[sdinfoserv]

Verizon generates$137B (billion) in revenue in 2022. In Q2 of 2023 Verizon had 143.3 Million subscribers: https://en.wikipedia.org/wiki/... [wikipedia.org] . 143 million X $2 per line extra is $286,600,000. Paying the $100,000,000 is little more than a tax, they're still almost $200,000,000 ahead. This what we are left with then the GOP guts corporate regulations and regulatory agencies. Case in point - In order to pass the latest budget deal just to keep the government open a few months, the GOP demanded the IRS be

Why do customers have to submit claims?

[PJ6]

For existing customers, it should be an automatic refund into their account.

Like, two people will submit a claim.

Who thought that was a good idea?

The Funds Will Be Recovered

[TwistedGreen]

Dear Valued Customer, please find your settlement check enclosed. In order to pay for the settlement, we are raising the fee by 70%.

The fault is systemic

[larryjoe]

The real problem is that (1) the offender doesn't have to admit fault and (2) the offender doesn't have to promise not to re-offend. Of course, the solution seems to be to win a second class action lawsuit with greater penalties. However, this is ironically a motivation for the plaintiff lawyers to let the offender off with a "reasonable" fee. That allows the lawyers to get rich with a first lawsuit and then double dip with a second lawsuit.

it's all too common

[Virtucon]

I did a stint a few years ago with a client in a very highly regulated industry having to deal with jurisdictions at county levels across the US. Every day there were marshalls delivering stacks of legal notices and subpoenas to the front desk of this place. It was just part of the business they were in and they were successful even though they had lawyers across the country dealing with cases all the time. Then they were bought out and the new owners brought along with them their philosophy, since these ca

and soon there will be...

[renegade600]

soon, Verizon customers could be seeing an additional fee for legal services on their bills.

orly?

[CEC-P]

Gee, am I responsible for reimbursing them on a separate line item for the office supplies at the headquarters too? They need that to do their jobs as well as complying with laws that they already knew about when setting the prices. It's almost like it's complete BS and a scam or something.