Verizon Wireless has agreed to pay $100 million to settle a class action lawsuit alleging the company charged millions of customers illegitimate fees. The settlement could provide long-awaited relief to potentially millions of current and former Verizon customers who were unknowingly charged the fees over the last several years.
Background of the Fees and Lawsuit
Since 2005, Verizon has charged customers an “administrative charge” or “service fee” on top of their monthly wireless bill. The fees ranged from $.99 to $1.99 per month. While small on their own, they added up to huge profits for the telecom over nearly 20 years across its vast customer base.
Verizon claimed these fees were to defray costs of providing wireless service. However, two Verizon customers filed a lawsuit in 2021 alleging the fees were excessive and purely for profit.
Settlement Terms and Payout Details
Under the proposed settlement filed on January 5th, 2024, current and past Verizon Wireless customers are eligible to receive a payout.
The settlement establishes a $100 million fund which will be divided amongst all valid claims on a proportional basis after deducting attorneys fees and other costs. The final payout amount per customer will depend on the total number of approved claims. Experts estimate it could provide approximately $40-60 for those who submit claims.
Eligible Customers
All current postpaid and prepaid Verizon Wireless customers as of December 31, 2023 can file a claim. Former customers who were subscribers at any time between June 30, 2016 and December 31, 2023 can also submit claims.
The settlement website indicates 2.5 million people have already filed, but Verizon estimates over 20 million past and present customers could be eligible for payouts.
How to File a Claim
Both current and former Verizon customers can submit claims by July 5, 2024.
The quickest way to file is online at www.VerizonSettlement.com. The website has specific instructions and an easy claim form.
Alternatively, you can print out and mail in a claim form available on various websites.
Claimants will need to provide basic subscriber information such as:
- Full name
- Current or past Verizon Wireless number
- Current mailing address
- Past addresses associated with your Verizon account
Verizon and an independent administrator will validate all claims against company records.
| Deadline | Method | Required Information |
|---|---|---|
| July 5, 2024 | Online form at www.VerizonSettlement.com |
|
| July 5, 2024 | Print and mail claim form |
|
When Will Payouts Occur
If final approval is granted after the July 5th claim deadline, distribution checks or account credits will likely go out near the end of 2024 or early 2025 based on prior class action settlements.
All valid claimants will receive a proportional share after attorneys fees and administrative costs are deducted from the $100 million settlement fund. Individual payout amounts could range from $40-60 per person depending on number of total approved claims.
What’s Next
The settlement still requires final approval from the judge presiding over the case. A final approval hearing is scheduled for July 15, 2024.
Until then, Verizon denies any wrongdoing and maintains the fees were legitimate and disclosed properly. However, they chose to settle to avoid further legal expenses.
If approved, the settlement fund will distribute payouts to millions of current and former Verizon Wireless subscribers. And going forward, the company has agreed to be more transparent in billing for fees like these.
It represents one of the largest consumer class action settlements ever against a wireless provider. And it provides long-sought monetary relief to customers affected by Verizon’s contested administrative fees for nearly 20 years.
Why This Matters
This record settlement underscores the substantial profits companies generate from add-on fees that go unnoticed by consumers.
While the FCC requires cell phone companies to conspicuously list mandatory taxes and charges, non-government fees can still get lost in the fine print. Critics argue telecoms and other industries use these opaque fees to squeeze more revenue from their customers.
Additionally, the billions major providers like Verizon receive in government subsidies and tax benefits are rarely passed on to consumers. Settlements like this put wireless carriers on notice that unfair billing practices will not go unchecked.
With cell phone and data bills steadily rising, this case also creates momentum for regulators to demand more transparency from companies regarding ancillary costs baked into monthly plans. Otherwise, Americans risk incurring billions per year in business-driven fees largely absent the competitive pressures that constrain other prices.
Ultimately, more vigilant customers, detailed billing, and proactive regulation is required to prevent companies from subtly reaching deeper into consumers’ pockets through suspect administrative fees unlikely to be noticed.
To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.
