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Verizon's billing snafu: Watch your wallets, gadget users

Verizon's billing snafu: Watch your wallets, gadget users

It's bad enough that the big wireless companies all-too-often provide substandard service at a premium price

It's bad enough that the big wireless companies all-too-often provide substandard service at a premium price. And it's even worse, when they pad their bills with "crammed" charges or "gotchas" that siphon money from our wallets a drip a time. But now we've leaned that Verizon billed customers tens of millions of dollars for services they never ordered.

[For more advice on protecting your wallet from overcharges, see CIO.com's recent article, How to Avoid Mobile Phone Bill Shock: 5 Fixes . ]

The company has admitted its mistake (but not, as far as I can discern, apologized) and will be giving customers credits on their bills of $2 to $6, and sending checks to former customers in October and November. The refunds could total as much $90 million, though the final amount has not yet been set.

End of story? I don't think so. It took Verizon a couple of years to come to grips with this and the company seemed to ignore ongoing customer complaints about incorrect charges. That makes me suspicious; and now it appears that the FCC is suspicious as well.

Michele Ellison, the chief of the FCC's enforcement bureau, said in a prepared statement that the agency was "gratified to see the repayment, but for millions of Americans it's a day late and a $1.99 short. Questions remain as to why it took Verizon two years to reimburse its customers and why greater disclosure and other corrective actions did not come much, much sooner." The agency is still investigating the matter and could levy fines or order a change in practices.

Charges Follow One Woman After Death

The issue apparently came to light after a consumer columnist at the Cleveland Plain Dealer noticed some odd charges on her phone bill and wrote about it, prompting a flood of comments from readers complaining about the same issue. (Hey, those "dead tree journalists" can still be mighty useful.)

The newspaper reported that customers were erroneously billed $1.99 per month for Internet usage on their cell phones--even people who had not used their phones. In some cases, the phones were not Internet-capable, were broken or, in one case, sat idle in the home of a woman who had died a few weeks earlier.

One of the most annoying problems was caused by the design of some Verizon phones that made it all too easy to accidentally hit a button that takes the user to the Web. Even when the function is immediately cancelled, the user is hit with a $1.99 data charge. (To be fair, published accounts say that some AT&T phones are also poorly designed, sticking users with unwanted data fees.)

Verizon initially said it doesn't charge users for an accidental connection to the Web. But then it contradicted itself in the statement announcing the refunds: "As we reviewed customer accounts, we discovered that over the past several years, approximately 15 million customers who did not have data plans were billed for data sessions on their phones that they did not initiate."

It's not clear how Verizon customers who don't get the refund can qualify. My call to Verizon on this topic was not returned. I would assume that they'll have to start with customer service and be prepared to escalate. And escalate.

How to Defend Yourself

As egregious as it is, Verizon's crummy handling of the case is pretty much a template for how wireless carriers abuse the billing process. A few months ago, I wrote about a T-Mobile customer in San Francisco was hit with an unexpected $800 phone bill.

A recent survey by the FCC found that about one in six cell phone users has experienced what the agency appropriately enough calls "bill shock," an unexpected spike in a monthly bill unrelated to a change in contract or service. And to date, few, if any, wireless providers, are willing to take the teensy, but effective, step of sending a text message to users as they start to run out of minutes.

Then there's the all-too-common practice of allowing cramming, ongoing charges from third parties that can run up bill although the customers didn't really mean to order the service. "Free" ring tones are a great example of that.

And wireless phones bills are hard to read and often contain obscure, but legitimate, charges, that appear every month and are only explained in the fine print of a contract.

Defending yourself against this nonsense takes a fair amount of vigilance. First, make sure you understand your contract, particularly the amounts of minutes you're paying for, and how much additional minutes will cost. Most carriers have a feature that allows you to check your usage; do that from time to time.

Second, and this is really tedious, go over your bill carefully each month. Look for charges that seem wrong and call customer service and demand an explanation. If you don't get it, escalate to a supervisor. Be persistent, because those reps are trained to deflect our anger. Indeed, Verizon kept telling its aggrieved customers that the unfair charges were the fault of the dumb users.

If you're really mad, complain to the FCC. One complaint won't spur federal action, but a raft of complaints may well. That may well be the most lasting lesson of this sad story.

And finally: For once, the rumor that Apple and Verizon will team up to offer an iPhone next year may well be true. Assuming it is, there's reason to be cautious before you switch. AT&T has earned a really bad reputation for customer service and call quality. Verizon seems to be no better on the service end. Is its network ready for an onslaught of data-happy iPhone users? We'll see.

San Francisco journalist Bill Snyder writes frequently about business and technology. He welcomes your comments and suggestions. Reach him at bill.snyder@sbcglobal.net.

Follow Bill Snyder on Twitter @BSnyderSF. Follow everything from CIO.com on Twitter @CIOonline.

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