F.C.C. Is Told Verizon Underpaid Data Refunds

By , courtesy NYTIMES

WASHINGTON — An independent telecommunications lawyer filed a petition with the Federal Communications Commission on Tuesday, claiming that Verizon Wireless had vastly understated the amount it collected from false data charges on customer bills when it agreed to refund the levies in 2010.

The lawyer, Arthur V. Belendiuk, of Washington, said in a petition for investigation that Verizon and F.C.C. documents obtained through a Freedom of Information request contained evidence indicating that the company might have taken $240 million or more from the false charges, more than four times the almost $53 million it agreed to refund.

A Verizon spokesman, Torod B. Neptune, said that the allegations were without merit, and declined to comment further. F.C.C. officials and the Office of the Inspector General declined to comment.

The Verizon charges came to light in 2009 in articles in the Cleveland Plain-Dealer and The New York Times.

Thousands of Verizon Wireless customers had been complaining about mysterious $1.99 data charges on their cellphone bills. The customers said they had not used the Internet connection function on their phones; some demonstrated to Verizon employees that the charges had occurred randomly, often when the phone was turned off or the battery removed, and at times on accounts that did not have a phone capable of connecting to the Internet.       ATT-Bell-1969-logo[1]

The F.C.C.’s enforcement bureau investigated and in October 2010 reached a consent decree with Verizon. The company agreed to pay $52.8 million in refunds to customers and a payment of $25 million to the United States Treasury to end the investigation. At the time, it was the largest such payment in F.C.C. history, the agency said.

The F.C.C. found that about 15 million pay-as-you-go customers could have been affected by the false charges over a period of about 30 months.

“Today’s consent decree sends a clear message to American consumers: the F.C.C. has your back,” Julius Genachowski, then the F.C.C. chairman, said on Oct. 28, 2010. “Today’s settlement also includes strong F.C.C. oversight and accountability to ensure that Verizon Wireless fully repays what they owe to their customers and puts new measures in place to improve customer service.”

Mr. Belendiuk, who frequently represents television stations and broadcasters before the F.C.C., said the documents produced by Verizon in the investigation indicated that in trying to assess how to fix the problem, the company’s proposed solutions would cost it $8 million to $10 million a month.

The documents, Mr. Belendiuk said in his petition, indicated that when the company put in place a fix for the flaw, “Verizon’s $1.99 data charge revenues dropped by approximately $8 million per month.”

Mr. Belendiuk said he had filed the Freedom of Information request and the petition on his own behalf and not for a client, and that he was interested in the case from the time it was disclosed. The settlement itself, as a precedent, “makes a difference for me as an attorney, in knowing how to advise my clients,” he said.

Thank you, TiA


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This entry was posted on July 4, 2013 by in COMMERCE.

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