Verizon Fined $25 Million by FCC for Data Download Overcharges


Verizon Communications Inc. (VZ) was fined a record $25 million by the Federal Communications Commission and agreed to refund an additional $52.8 million to customers to settle allegations that the largest U.S. mobile-phone company overcharged customers for data fees.

The FCC found that Verizon may have overcharged as many as 15 million wireless subscribers over the past three years for its so-called "pay-as-you-go" data plans, the regulator said in a statement Thursday. The excess fees stemmed from, among other things, unauthorized data transfers from applications and unwanted data transfers to customers whose content filters were supposed to stop such transfers.

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The settlement ends a 10-month investigation into Verizon's so-called "mystery fees" -- which included charges of $1.99 per megabyte of downloaded data that was billed to customers who didn't subscribe to that particular plan. Regulators began to probe the company in January because of customer complaints.

"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," said Michele Ellison, chief of the FCC's enforcement bureau, in Thursday's statement.

About one in six Verizon customers will receive refunds, predominantly between $2 and $6, Verizon said in a separate statement.

"We are issuing credits and refunds on our own initiative and because it is the right thing to do for our customers," Verizon said. "Fixing this for our customers has been our aim since last year."

Verizon shares were little-changed at $32.41 in New York Stock Exchange trading Thursday. The company said last week that third-quarter earnings fell 25% from a year earlier largely on higher costs related to pension settlements. Revenue fell 2.9% to $26.5 billion.