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Verizon Overbilled 15 Million Customers For Years Because of Software Errors

Overcharged customers by up to $90 million

3 min read

Verizon Overbilled 15 Million Customers For Years Because of Software Errors

On Sunday, Verizon announced that it had "discovered" that it had over-billed about 15 million customers for several years because of a software error.

According to Verizon:

"... 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. These customers would normally have been billed at the standard rate of $1.99 per megabyte for any data they chose to access from their phones. The majority of the data sessions involved minor data exchanges caused by software built into their phones; 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."

Most of the refunds or credits would amount between $2 to $6, although some customers, Verizon said, will receive larger amounts.

The total owed customers amounts to between $30 and $90 million.

Reading the Verizon press release, you would never guess that the reason Verizon "discovered" the billing error was because of customer complaints to the Federal Communications Commission (FCC). In fact, the New York Times reports that Verizon is in talks with the FCC over the complaints, something that the FCC confirmed today (see press release in PDF format).

The FCC said that it has been investigating what it called Verizon's "mystery fees" for the past ten months. Its inquiry was sparked by a column of a reporter with the Cleveland Plain Dealer that highlighted the hidden fees and the difficulty in trying to get them removed. The fees apparently have been appearing on Verizon customer bills since 2007.

The New York Times says that the FCC is now determining whether it should fine Verizon for its poor customer service and its failure to notify customers of the erroneous billing in a timely manner. The Times notes that:

 "Customers who contacted Verizon about the charges said that the company had often refused to reverse the charges or discouraged them from blocking the data service on their phones."

In fact, the Times said, in December 2009, Verizon downplayed the issue and said that customers were protected from minimal, accidental usage charges because Verizon Wireless did not charge users when their browser was launched, and opened to the Verizon Wireless Mobile Web homepage. Sunday's statement by Verizon seems to contradict that position, the Times notes.

While US telecoms aren't much admired for the quality of their customer service, they don't seem to be as bad in that department as telecoms in Australia.

The situation had gotten so bad there that in April, Australian Communications and Media Authority Chairman Chris Chapman decided to launch an investigation into complaints such as those from smart phone customers who have been complaining about rogue Internet data access charges. 

The Australian quotes Chairman Chapman as saying:

 "The poor complaint handling of the industry is legendary."

Customer complaints about Australian telecom customer service have surged over seven plus years, with increases again seen this past year in both the number of complaints about customer service as well as the number of customer complaints involving the customer-complaint handling-procedures themselves of the telecoms.

Legislation forcing the telecoms to improve their customer service processes is being considered as part of Chairman Chapman's inquiry.

Another article in the Australian, this time from September, reports that the telecom industry's lobbying organizations - the Communications Alliance and the Australian Mobile Telecommunications Association - have been trying to preempt any such legislation. The Australian says that they admit that there may be customer service problems, but they are in large part caused by technology-challenged customers.


Blaming your customers for your poor customer service doesn't seem like a winning strategy to me.

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