Verizon To Pay $25M For Years of 'Mystery Fees'

Ponca City writes "The Washington Post reports that the FCC has reached a record $25 million settlement with Verizon Wireless over the company's wrongly charging subscribers 'mystery' Internet fees over the past several years — the largest settlement in FCC history. With the action, Verizon Wireless's total costs associated with false data fees reached $77.8 million, one of the largest payouts for false business practices in the communications services industry. 'People shouldn't find mystery fees when they open their phone bills — and they certainly shouldn't have to pay for services they didn't want and didn't use,' says FCC Chairman Julius Genachowski. 'In these rough economic times, every $1.99 counts.' Verizon Wireless said in a news release that its overcharges were inadvertent. 'We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills.'"

Comments

An insult of a fine

[Sonny Yatsen]

It should also be noted that Verizon, as part of the settlement, is also refunding $52.8 million to their customers. But let's look at this more closely, shall we?

Verizon Wireless has 93.2 million subscribers. Let's assume (VERY conservatively) that only 5% of their customers were hit with bogus fees. Let's also assume that everyone who was overcharged was overcharged the bogus fee of $1.99 per month. The period in which the bogus fees were charged was about 3 years.

So we have: 4.66 million (or 5% of the customers) * (1.99 * 36) = 333,842,400 dollars. And that's the REALLY conservative estimate.
If every one of Verizon's consumers were overcharged $1.99 for 3 years, then that would come out to be 6,676,848,000 dollars.

So, for 3 years, they plundered their customers with bogus fees and now they're walking away paying back less than 1/3rd of the REALLY LOW END estimate of their misbegotten gains. No wonder companies act so egregiously bad! Why would they have to do things according to the law if they'll make more by breaking the law than they'll ever have to pay back in fees?

I like how they characterized it as just some clerical mistake. I wish I made clerical mistakes that can net me $300 million dollars.

Re:An insult of a fine

[Shakrai]

Verizon Wireless has 93.2 million subscribers. Let's assume (VERY conservatively) that only 5% of their customers were hit with bogus fees.

Well, not to defend Verizon, but 5% sounds about right to me. Between my family share plan (5 lines) and my corporate plan at work (46 lines) I've only seen this issue happen on two lines (2 / 51 = 3.9%).

It seems to be related to the inability of Verizon's billing system to properly determine the source of data. As an example, their backup assistant application is supposed to be completely free but I've seen it generate data charges before. Their billing system is supposed to discount very quick data sessions but I've seen phones hit with this fee when someone accidentally hit the "mobile web" button and exited out of it right away.

To Verizon's credit they never once argued with me when I called to request a refund of this fee. I did so every single time I saw it charged and received a refund every single time. In spite of those refunds I still got the credit from for this fee. Go figure.

Re:An insult of a fine

[Anonymous Coward]

Good analysis. So, for Verizon, this was a profitable venture. And profitable for whoever the fine is paid to as well, right?

Doesn't this all feel more like an incentive to continue this behavior if the full amount of the money wasn't refunded in addition to the fine?

Re:An insult of a fine

[Paradigm_Complex]

[quote]I like how they characterized it as just some clerical mistake. I wish I made clerical mistakes that can net me $300 million dollars.[/quote] It'd be interesting to see how much of a dent this makes in their total income - it may be feasible that this was, in fact, simply a clerical error depsite the fact it'd be huge for the vast majorit of us. This doesn't justify it, of course, but I wouldn't rush to assume it was obviously malicious and intentful.

Re:An insult of a fine

[Oxford_Comma_Lover]

> So, for 3 years, they plundered their customers with bogus fees and now they're walking away paying back less than 1/3rd of the REALLY LOW END estimate of their misbegotten gains.

Yes, it's almost as if they were trying to announce a settlement fee/fine due to an upcoming election.

Re:An insult of a fine

[morgan_greywolf]

Except that TFA, which is Verizon Wireless to pay $25M for spurious fees, says that Verizon agreed to provide refunds to 15 million, not the 4.66 million the parent erroneously estimates. I find it very curious that Verizon is not disclosing the actual total amount of the refunds. Smells like a coverup.

Re:An insult of a fine

[Anonymous Coward]

Verizon Wireless said in a news release that its overcharges were inadvertent. 'We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills.'

TRANSLATION: "We accept that we got caught billing people for stuff they didn't order, and we promise to be craftier next time in hiding these 'accidental data charges' on their bills."

Re:An insult of a fine

[Anonymous Coward]

What's really funny to me is that, while the premise of the movie "Office Space" was loosely based on this principle (stealing very small fractions of a transaction over large numbers of transactions), it is in reality CORPORATIONS who have actually embraced this.
While we were all laughing at what a fun, but silly prospect such a thing would be (given the ridiculous jail time that would surely accompany such a proposition for an individual) the corporate fat-cats' eyes were lighting up at the possibilities.

By allowing this sort of bullshit to continue, the government is effectually saying, "If you want to break the law and get away with it, start a corporation. The bigger it is, the more you'll be able to get away with."

Maybe we should all start incorporating ourselves? All of the benefits of being a citizen with none of the responsibilities for law-breaking.

Or.

Perhaps we could just pass laws requiring businesses to pay back TENFOLD to their customers what they've stolen when this sort of shit happens.

Re:An insult of a fine

[babyrat]

Well their total wireless revenue was about $61B in 2009...that is just wireless revenue...$108B overall.

You do that math...

Re:An insult of a fine

[rm999]

"Let's also assume that everyone who was overcharged was overcharged the bogus fee of $1.99 per month. The period in which the bogus fees were charged was about 3 years."

Wrong assumption. I am one of the people who got charged the fee, but it only happened once or twice in a three year period. You only get the fee the months you accidentally pressed the button. The issue is that pressing the button loads a webpage, which uses up ~0.5 kb. Then, Verizon rounded that up to 1 MB, and charged a couple of bucks.

Re:An insult of a fine

[geekoid]

A) It's only customers with a specific type of plan So less then all their customers. If only we had a number..oh wait we do. 15 million. people effected.

B) It's wan't always re occurring. So NOT 3 years
C) most of them were cause from apps people loaded n the phone, not verizon.

If your number where any more wrong, they would be letters.

Re:An insult of a fine

[Anonymous Coward]

Remember the extra fee everybody had added to their bill to pay for the privilege of being able to transfer numbers to other carriers? (hint we're still paying for it)

Well, expect a new "Regulatory Compliance: $2.99" fee.

Re:An insult of a fine

[sxeraverx]

So, for Verizon, this was a profitable venture. And profitable for whoever the fine is paid to as well, right?

Doesn't this all feel more like an incentive to continue this behavior if the full amount of the money wasn't refunded in addition to the fine?

Even if this instance weren't profitable, it'd still be incentive to continue doing other things like this. If you get caught, just pay it back, no harm no foul. And if you don't get caught, well, then you made out in the end.

Isn't this is exactly the kind of behavior that the possibility of punitive damages in a court settlement is supposed to prevent? If so, I realize punitive damages should probably only be awarded in the case of negligence, but it seems like if this has been going on for three years, it's hard to claim it's an accident and not be considered negligent in fixing it. But for some reason, the FCC decided they wouldn't pursue those damages.

IANAL, and I don't have much experience with the law, but I'm curious whether or not this still leaves Verizon open for a class action lawsuit. If this is has been going on for three years, with charges customers would have had to dispute each month, it seems like Verizon should reimburse their customers for the time they spent disputing the charges, and pay hefty punitive damages to discourage Verizon and others from doing the same thing in the future.

Assuming an average income of $32,000, and a probably conservative estimate of 15 minutes to detect, report, and rectify the the charges, each month, over 36 months, that's

$16/hour * .25hours/month * 36 months + $2/month * 36 months = $216 per person affected.

If 5% of the people were affected, that comes out to just over $1 billion in compensatory damages. On a conservative estimate.

Re:An insult of a fine

[shadowfaxcrx]

The really amusing bit is that corporations are legally considered people, unless it's disadvantageous to the corporation in a given situation. Want to donate to a politician? You're a PERSON! Want to run ads blasting another politician? You're a PERSON!

Want to avoid the felony grand theft penalties PEOPLE face when they steal millions of dollars? Oh, well, OK, I guess you're not a person until the judge makes his decision on the penalty you face.

To my way of thinking, if corporations want to be considered people, then that's fine. But if the corporation commits a crime, it goes to jail, by which I mean no business transactions except for payment of debt, at ALL, for the length of the jail sentence. Verizon steals millions of dollars? Guess what folks? You're shut down for the 1-20 year jail sentence. Yes, that will ruin you, but you're the one who wanted to be a person.

Re:An insult of a fine

[MickyTheIdiot]

That's the reality of corporate personhood in a nutshell.

All of the advantages (rights, freedoms, profits)
with none of the disadvantages (jail, death, taxes)

(And don't say they pay taxes. The majority of corporations in the U.S. pay no taxes AT ALL).

If corporations are bad actors in a country, they ought to be have their charter revoked with no enumeration to stockholders. If CEOs are so responsible for a company (as they insist every time the subject of CEO pay packages come up) then they go to jail when the company breaks the law.

Re:An insult of a fine

[dimeglio]

I certainly hope it will be a warning sign to other companies. However, since they can get away with a rather small fine, and pass on the cost to the customer anyways, I'm not quite convinced it's an effective deterrent.

Re:An insult of a fine

[numbski]

The old rule of "never assign malice where ineptitude/stupidity/incompetence will suffice" seems to apply here. It could be malice. Could be intentional - but *really*. What engineer writes their software to intentionally miscalculate? These people pay mobile phone bills too.

Re:An insult of a fine

[RobertLTux]

oh and another thing any of the board members should have a federal maximum wage of say $80.00 an hour (no salaried jobs) for the entire term of the CEOs jail term.

Re:An insult of a fine

[numbski]

Isn't this is exactly the kind of behavior that the possibility of punitive damages in a court settlement is supposed to prevent?

You're forgetting the *settlement* part. Not a judgement. A judgement can carry punitive damages. A settlement is whatever the parties agree to outside of court.

Re:An insult of a fine

[shentino]

I consider it malicious to be so profit driven that you willfully neglect the care required to avoid such foulups in the first place.

Tech fuckups happen, but it's still evil (tm) to just turn a blind eye and whistle innocently until someone complains about it.

Re:An insult of a fine

[shentino]

Thing is by controlling the media the corporations have the politicians by the balls, since they determine who gets air time during election season.

Pissing off (or failing to kiss up to) a corporation that is exposing you to your voters is political suicide.

And self incorporation doesn't work.

The same corporations that control the media also don't much care for small fry on their turf, and they regularly can and do litigate their competition into oblivion. It is a legal jungle out there, where survival of the fittest reigns.

Re:An insult of a fine

[Anonymous Coward]

Back when I was 17~19, I was on my dad's family plan. We got a mystery $14.99/month VPAK that appeared on multiple phones multiple times. None of us used the multimedia features of the phone, and I even went online and parental-control-banned all multimedia features from my own phone, but the charge still kept coming back. Of course, every time we complained they revoked the charge, but we had to scan our bill every month to make sure we didn't have the bogus charges.

Finally, after the charge came back at least 6 or 7 times, my dad got fed up and told Verizon that if the charge appears there one more time, he's canceling the whole family plan, and the company that he is an executive at will switch to Sprint (the company has a couple thousand verizon phones). The charge never re-appeared.

I am completely convinced that these charges are intentional, and I bet they target people who have kids and family plans, as they're more likely to blame their kids for downloading something than complain that Verizon was giving them bogus charges.

Re:An insult of a fine

[GumphMaster]

They far more regularly use just the threat of litigation because they know full well that:

• The first of rule of running a business is to "Stay in business". You are no good to anyone (customers for small business) if you are insolvent.
• For the little guy just engaging legal representation will consume a profit margin for the year or more and that's before it gets to court and the delaying tactics start.

Re:An insult of a fine

[erroneus]

I, on the other hand, have witnessed problems with every line of Verizon service where I work. That is everything from Verizon Wireless to T1 to OC3 and MPLS services. Verizon billed another company for our service for almost 3 months. And for the services we have there are always unanswered and "unanswerable" items on our bills. We are presently in a dispute state meaning they can't turn our service off for non-payment which is part of their standard agreement. I would urge you do the same on your business accounts with issues. What's weirder still, in spite of the fact that no representative can explain the strange charges, they insist that we owe them. Imagine that? We owe something that no one understands? Not even Verizon? Really.

I will never willingly be a Verizon customer.

Re:An insult of a fine

[erroneus]

There is no such thing as negligence on this scale. To see excess money coming in without explanation is not something that would go unnoticed for any amount of time. What's more, there were countless complaints from customers about it. Complaints that were ignored or refused in most cases. It took the FCC to get them to reverse on this. Not only should they have known on their own, but they were informed from thousands and thousands of victims and still did nothing about it.

If you really think this was just carelessness you are a complete fool.

Re:An insult of a fine

[grcumb]

like how they characterized it as just some clerical mistake. I wish I made clerical mistakes that can net me $300 million dollars.

It'd be interesting to see how much of a dent this makes in their total income - it may be feasible that this was, in fact, simply a clerical error depsite the fact it'd be huge for the vast majorit of us. This doesn't justify it, of course, but I wouldn't rush to assume it was obviously malicious and intentful.

You know, I'd love to agree with you, but tell me this: What are the odds that they would be willing to allow a clerical error that lost them a similar amount of money?

Re:An insult of a fine

[hedwards]

In the US, the fines are pretty much always a slap on the wrist. Because as soon as you start suggesting a real penalty that might actually deter some of the malfeasance, they start threatening to raise rates and institute layoffs.

Re:An insult of a fine

[Pharmboy]

What engineer writes their software to intentionally miscalculate?

I take it you never watched Office Space? ;)

Re:An insult of a fine

[SETIGuy]

$80 an hour is too high. Make it the average of the median household income and the poverty line (which would be about $16.30 a hour) in a non-management job while sequestering any investments and then maybe (just maybe) board members would be a little vigilant.

Probably not. I can't think of a job that pays $16.30 an hour that a corporate board member would be qualified to do. Rubber stamping the desires of the CEO isn't a useful skill.

Re:An insult of a fine

[h00manist]

I think it's completely intentional. I remember seeing some business articles a few years back recommending companies to increase revenue though random fees attached to invoices, and seeing these lists of small fees added on to all my bills, feeling really helpless.

Re:An insult of a fine

[Jaysyn]

I have an modern update for that old canard. "Never assign malice where *greed* will suffice".

Re:An insult of a fine

[Pharmboy]

Not that it is justified, but AT&T is about the same with their business accounts. It took us most of a year to get them to realize they owed us over $6,000, and 6 months after that to get them to apply the credits to our bill. Needless to say, once the credits were used up, we changed our 12 phone lines and 3mbit worth of data lines over, to Time Warner, and get better service, similar or better uptime, for about $30,000 less per year.

Re:An insult of a fine

[sumdumass]

Dude, pass that bong your sucking on over here.

Want to avoid the felony grand theft penalties PEOPLE face when they steal millions of dollars? Oh, well, OK, I guess you're not a person until the judge makes his decision on the penalty you face.

They are still a person in the same sense. The problem is how to you prove that they acted in a certain way instead of careless employees making mistakes or acting on their own (with and or without knowledge of the consequences)? It's very difficult. But rest assures, if there is proof that a CEO, Board Member, or any Manager gave orders to fleece the public, those people can and will be held criminally accountable. Being a company doesn't shield anyone from any criminal prosecution, it shields them from criminal prosecution through an act that was no fault of their own. And even to that point, carelessness can still be grounds for criminal prosecution, just ask the CEO of Tyco and World Com.

This country is founded on the basics of being fair in out judicial system and criminal prosecution. This means actually prosecuting people who committed the crime, not some stand in who you cannot prove had any role. We do not allow corruption of blood, metaphorically or literally. Thankfully, even when they cannot prove any single person at fault, but the crime or wrong was committed, there is a legal concept called"Respondeat superior" that allows vicarious liability to wrongs committed by people that are attributed to a corporation.

To my way of thinking, if corporations want to be considered people, then that's fine. But if the corporation commits a crime, it goes to jail, by which I mean no business transactions except for payment of debt, at ALL, for the length of the jail sentence. Verizon steals millions of dollars? Guess what folks? You're shut down for the 1-20 year jail sentence. Yes, that will ruin you, but you're the one who wanted to be a person.

Obviously, you haven't thought this through much. If a company is forced to not operate, it still owes it's shareholders/owners it's value. They can simply take that and start another company with new management doing the same line of business. That's why a fine is much more valuable to prosecuting a corporation. If you wanted to impose the same general liability of "no business for 1-20 years", then fine them an amount equaling the revenue minus expenses for that time period and enforce monitoring that generates a proper attitude towards serving the public. Then if they liquidate, which even convicted felons are allowed to do if the fruit is not borne of the crime they are convicted of, the fine has top priority in payout. In other words, they cannot simply open back up under a different name because the value goes to pay the fine before being returned to shareholders or debtors. The government gets theirs first.

But in this, you are still neglecting that corporations are not sentient beings and they cannot make decisions or operate on their own. There are people running the corporation (which is the basic component structure of why corporations are necessary) and it's those who did the deed that is criminal. Justice can be served just as well by prosecuting the people directly responsible for the crime and adding vicarious liability to the corporation for failing to stop it. In this case, once the problem was legally brought to Verizon's attention, they claimed it was a mistake (prove them different with facts and not innuendos and quick conclusions) and they were willing to make full restitution. And yes, that's the entire point behind actions like this, to make the public whole again. If Verizon refused to do so, they would have been prosecuted, most likely fined, and had to give refunds anyways.

Re:An insult of a fine

[Charliemopps]

Also, the FCC gets $25mil out of the deal so it's a win/win situation. Verizon can then levy a "Bogus fee settlement fee" on all their customers to pay off the settlement. And if they accidentally collected more than the $25mil with their new fee, all the better!

Re:An insult of a fine

[commodore64_love]

>>>ever assign malice where ineptitude/stupidity/incompetence will suffice

True but sometimes the incompetence is "embraced" by the management because it turns-out to be so profitable for them. Like this guy in this video. Verizon was and still is aware of the problem, but has done nothing to fix it, because it works to their advantage! Anyway: This guy owes .002 cents/KB times 35896 KB used == 71.8 cents. But Verizon is trying to charge 71.8 dollars. No wonder I hate corporations.

http://www.youtube.com/watch?v=D2isSJKntbg

Re:An insult of a fine

[Shakrai]

and seeing these lists of small fees added on to all my bills, feeling really helpless.

A business attaching fees to your invoices is all it takes to make you feel "really helpless"? You know you could walk away from Verizon Wireless anytime you want, right? Wireless service is hardly a matter of life and death....

Re:An insult of a fine

[Shakrai]

Want to donate to a politician?

Corporations can't donate money to politicians or political campaigns. That was and remains the law of the land.

Re:An insult of a fine

[Reaperducer]

(And don't say they pay taxes. The majority of corporations in the U.S. pay no taxes AT ALL).

This is false. It's just something that politicians say to get under-thinking voters riled up. And then the under-thinkers latch on to this and repeat it as if it was fact. You obviously have never owned or run a company.

Re:An insult of a fine

[commodore64_love]

>>>they start threatening to raise rates and institute layoffs.

My reply would be something like this: "Okay. That won't change the amount of the fine because you committed a crime, and I intend to see you pay at least double the damages you caused. In fact I don't care if your entire company goes bankrupt. It will be quickly replaced by newer, better companies. Look what happened to Circuit City - we're better off without CC and I bet we'd be better off without Verizon too."

Them: "....."

Re:An insult of a fine

[Anonymous Coward]

A) It's only customers with a specific type of plan. So less than all their customers. If only we had a number..oh wait we do. 15 million people affected.
B) It wasn't always occurring. So NOT 3 years.
C) Most of them were caused by apps people loaded on the phone, not Verizon.

If your numbers were any more wrong, they would be letters.

I'm really sorry. I would have moderated insightful, but it was so much effort to read your post that I thought fixing the worst of the problems would be more useful for others. Seriously, are you drunk?

Re:An insult of a fine

[Daniel Dvorkin]

But rest assures, if there is proof that a CEO, Board Member, or any Manager gave orders to fleece the public, those people can and will be held criminally accountable.

And all the customers will get ponies!

Re:An insult of a fine

[izomiac]

"Never attribute to malice that which is adequately explained by stupidity." - Hanlon's Razor

IMHO, it's more likely this was an honest bug since we all know how skilled Verizon is at basic math. Since it wasn't costing* them money they probably never had much incentive to make fixing it a priority. OTOH, it does show a pretty serious lack of concern for their customers as people rather than revenue-generating-database-entries.

* By "cost" it probably made them money, but they also lost customers who got angry and probably spent quite a bit on support/billing phone calls. So it's not all "profit".

Re:An insult of a fine

[Anonymous Coward]

This wasn't funny, it was completely predictable and unoriginal.

Re:An insult of a fine

[ergrthjuyt]

Mod parent up. US corporate taxes are among the highest in the world. I've owned or run a company.

Re:An insult of a fine

[24-bit Voxel]

I figured the Enron fiasco was the eye opener here. They paid back a tiny fraction of what they pillaged. Now it's standard operating procedure, I'm not surprised that Verizon did this. I remember when the phone company was billing a federal tax that didn't exist... for years and years. Regardless this is a pretty slimy thing to do to your customers.

Re:An insult of a fine

[Shakrai]

The TFA wasn't linked when I made my comment so I stand corrected on my estimation.

What do you mean they aren't disclosing the actual total amount of the refunds? It's right there in the article that you linked to in your post:

With the action, Verizon Wireless's total costs associated with false data fees reached $77.8 million, one of the largest payouts for false billing in the communications services industry. Verizon said this month that it would refund about 15 million subscribers $52.8 million for those unwanted data charges. Verizon partly attributed the problem to a software glitch in phones.

Still smell a cover up?

Re:An insult of a fine

[paganizer]

I've also got family share, with 5 lines; I just logged in to Verizon, and all my lines except 1, the one I have "unlimited data" on, have data charges. and those 4 other lines have data blocked.
1 of those lines is my mom's emergency phone, which has never had a text sent or received on it, at least not in the last 13 months; she doesn't do that sort of thing.
She also is being billed for 3 "premium" SMS messages this month...

Not counting the premium SMS thing, every month I get data charges on those blocked phones, even on phones that never made it out of the glovebox for long, long periods.

Their denial is sort of humorous.

Unfortunately for me, they have the only towers in my area.

Re:An insult of a fine

[paganizer]

I've also got family share, with 5 lines; I just logged in to Verizon, and all my lines except 1, the one I have "unlimited data" on, have data charges. and those 4 other lines have data blocked.
1 of those lines is my mom's emergency phone, which has never had a text sent or received on it, at least not in the last 13 months; she doesn't do that sort of thing.
She also is being billed for 3 "premium" SMS messages this month...

Not counting the premium SMS thing, every month I get data charges on those blocked phones, even on phones that never made it out of the glovebox for long, long periods.

Their denial is sort of humorous.

Unfortunately for me, they have the only towers in my area.

my apologies if this is a dupe.

Re:An insult of a fine

[The Wild Norseman]

and seeing these lists of small fees added on to all my bills, feeling really helpless.

A business attaching fees to your invoices is all it takes to make you feel "really helpless"? You know you could walk away from Verizon Wireless anytime you want, right? Wireless service is hardly a matter of life and death....

Yup, and pay a $400 early termination fee. Man, that'll really teach Verizon a lesson!

Re:An insult of a fine

[SudoGhost]

If user=someone_important
then amount=correct
else amount=possibly_incorrect

Boss: "You'd better find a way to make us more money, or you won't get a bonus!"
Programmer: "Got it...you see, what I did was..."
Boss: "That's nice. My printer isn't working, could you look at it for me?"

Re:An insult of a fine

[__int64]

The TFA is an article which this comment was written about. Comments such as this are indeed typically written about a TFA.

Re:An insult of a fine

[IICV]

But rest assures, if there is proof that a CEO, Board Member, or any Manager gave orders to fleece the public, those people can and will be held criminally accountable.

Good lord, do you really think that the only way for the public to be fleeced is for a C level executive to give written orders to do it?

Here's a scenario: John the CTO goes down to the billing engineers and tells them, verbally, "we want to see a 5% increase in profits from spurious charges. Make it happen."

This isn't written down anywhere. The meeting happened, but it was just a generic meeting with the team - nothing special, nothing permanent. Other business was covered too. How do you prove he said that?

Here's an even more common scenario: Joe the CEO tell John the CTO, "We're making money hand over fist. I want to make even more. Make it happen." So John the CTO runs his billing engineers ragged, and randomly weird charges and weird discounts start cropping up in people's phone bills. He throws fits about the weird discounts, they get fixed, but the weird charges - well, nobody really cares about them in the billing department, that's accounting's job.

I mean, how do you think horribly defective products like the Ford Pinto make it to the market? Most of the time, it's not because the people engineering them suck - it's because management, up above them, is driving the engineers too hard.

This is why I, personally, think we should really start increasing the amount of personal liability that managers high up in corporations are exposed to. Right now there is basically no penalty to saying "ship it now nerdboys, who cares if it might explode?" besides perhaps tarnishing the company's reputation (and who cares about that? Reputation is a currency traded on the order of decades, and you won't be around any more by that point). If there were actual, personal penalties for your company shipping a defective product (or fraudulently billing people, or accidentally sourcing from a Chinese factory that uses lead paint), then managers would make damn sure that what they're doing is right.

I mean, that's the normal argument for why CEOs make so much money, right? That they have far more riding on their shoulders? Why don't we make that argument true in fact, instead of just true in theory?

Re:An insult of a fine

[TheLink]

You don't have to bankrupt companies, nor is that a good way to achieve desired change, in my opinion.

All you need to do is say: "If stuff like this happens again, the people responsible are jailed for years". "Sorry, limited liability is only for 'civil' stuff, persistently taking money that isn't yours and been told you should stop taking comes under 'criminal'".

If you're a billionaire and your company gets bankrupted or closed down by the Gov/regulators it's not as bad as you sitting in prison for a number of years.

After all with the former you can still sail around the world with your multi-million dollar yacht (while pretending to be sad about the resulting thousands of job losses), whereas with the latter, a significant percentage of your expected lifespan is spent in a prison cell (while the next person in line takes your job).

Which hurts more? Which is more likely to deter a rich intelligent sociopath?

Why shouldn't people who persist in "taking millions that isn't theirs" not go to prison? Maybe the first time it's a mistake (hard to believe of course :) ), but after that, you better get your whole company toeing the line.

If a small-fry has been negligent and "making millions" for the company in defiance of the regulator's orders, the small-fry goes to jail, unless he can prove a boss told him to do it. If the boss can prove the CEO told the boss to do it, the CEO goes to jail.

AND if the amounts involved make up a significant amount of the company's revenues/profits (say 10% or more) the CEO goes to jail anyway. If you are that ignorant/incompetent as a CEO to not know that >=10% of the money your company makes is illegal you deserve to go to jail anyway. No second chance for this case, the first time we catch your company doing that, you go to jail.

I'm sure someone smarter can improve this further, but my point is, jailing the bosses often works better than taking money from the companies they run.

Re:An insult of a fine

[Anonymous Coward]

You know you could walk away from Verizon Wireless anytime you want, right?

And go where, exactly?

Re:An insult of a fine

[jimicus]

Absolutely right.

An "accidental data charge" as they put it wouldn't necessarily need massive amounts of forensic accounting - you could just ask the customer service call centre what people were complaining about and see about putting the biggest individual sources of complaint right. Which they should be doing anyway from a customer service perspective and because it reduces the call volume (and hence the number of man-hours you have to pay for) at the call centre.

This is negligence bordering on the criminal. I guarantee you someone - probably fairly high up - got wind of this pretty quickly once it became clear it was happening - and took the executive decision to ignore it on the basis it wasn't affecting enough customers to attract regulatory attention and it helped the bottom line.

Re:An insult of a fine

[u38cg]

How many billing and complaints management systems for tens of millions of customers have you written, implemented, and managed? Sometimes the obvious is not at all obvious.

Re:An insult of a fine

[Calydor]

Does the term 'vendor lock-in' mean anything to you? How about contracts you can't get out of for six or twelve months? Walking away isn't as easy as you make it out to be.

Re:An insult of a fine

[RMH101]

In the UK, Sky TV supply satellite service to millions of homes. You sign up on a 12 month contract, get given a set top box and the contract states it has to be connected to the phone line at all times, otherwise they'll bill you. In theory the box supplies them with user watching profiles etc. I know a LOT of people who have these boxes, connected to the phone, and get hit with a 14.99 UKP / month "fee" for it being disconnected. When you phone customer services (on a non-free number, on hold for up to an hour, bounced from desk to desk) you'll get it refunded with a promise that it won't happen again. Until next month, when it does.
Some of this is bureaucracy and incompetent helpdesks. But probably not all. Sure, you can fight it, but a lot of people won't notice, or will give up before getting it sorted.

Re:An insult of a fine

[Anonymous Coward]

My experience was different. On *ALL FIVE LINES* I had it happen every month for years. When someone finally had competitive technology in the areas I frequent (it was Sprint) I switched. However, Sprint has behaved almost *exactly* the same way for years as well. Hopefully we will get a check from Verizon to offset the same stuff happening from Sprint, and then maybe one day they will have to pay up as well.

Re:An insult of a fine

[SharpFang]

Any engineer whose boss tells them to do so. Not really "miscalculate", just like "simplify it"

If you can't reliably decide when the discount applies and when not to apply it, apply it only to the smallest possible 100% sure subset. If your app can't work correctly due to overwhelming complexity of correct solution, choose mistakes/simplifications in a way that brings most revenue.

Somehow I almost never see news "Company X lost $$$mln in erroneously assigned discounts to customers", "Company X made a $$$mln mistake in favor of n millions of customers", "Customers of X have not been billed for last month due to a computer mistake". Only in the opposite direction. Billed twice, denied discounts, made a mistake that costed the customers money...

Re:An insult of a fine

[Luckyo]

He omits important caveat. LARGE companies pay almost no to no taxes. Small companies pay a lot.

Because large companies have the lobbying power to make sure they don't have to pay taxes. As a certain infamous billionaire said, "taxes are for the poor".

Re:An insult of a fine

[Luckyo]

I mean, that's the normal argument for why CEOs make so much money, right? That they have far more riding on their shoulders? Why don't we make that argument true in fact, instead of just true in theory?

That reason is given as obfuscation to avoid unpleasant revolution-like movement when the masses figure out that the only reason most CEOs get the job is because they have the proper social contacts with those who are hiring.

Practical management skills are of really, REALLY low importance on the hiring requirement for top management. Pedigree, studying in the right university, having the right people you know and going to the right golf club on the other hand is very high. Essentially they are the new aristocracy, and often are just as clueless at practical management as aristocrats were.

Re:An insult of a fine

[SharpFang]

Unfortunately, proofs of said activity will be released only by order of the very people who committed the crime. The corporation can make it as easy or as difficult (impossible) for the investigator to gather proofs on selected employees. Papers get displaced, entries get deleted, witnesses know nothing, people who might know a thing are transferred to a unit in Paraguay, and the conclusion of the investigation is "general incompetence caused the mistake, and I wonder how such a mess of a company can act at all".

Nope, you must be really, really willing to lose your job, chance to be employed by others in the industry and risk lawsuits on bogus charges from your employer, if you, as an employee want to let investigators know -who- personally is responsible.

Unless, of course, that person was out of favor, and is the designated scapegoat.

Re:An insult of a fine

[Anonymous Coward]

Let's not blame "Verizon" for this. A live person chose to do it, unless it was a billing bug. The company should be able to trace this back. This isn't an "oops, my bad", it's "hehehe, know one will notice, it worked in superman etc". Stop letting bad people hide behind company names, it's time to find out which people are making this shit happen.

Re:An insult of a fine

[Jon_S]

Inadvertent?

There were stories out there where there were external buttons on certain phones that when pressed sent the phone directly to the web. So when you shoved your phone in your pocket the wrong way (as Steve Jobs would put it), sometimes you started accruing data charges. Inadvertent? Yes. Decision to make an extenal button (that is easily pressed by mistake) start the per-kilobyte billing? Your call on that. I know what I think.

Re:An insult of a fine

[Anonymous Coward]

We 'fixed' the accounting error. It will just work itself out naturally...

Re:An insult of a fine

[mcgrew]

And that's the REALLY conservative estimate.

Add that to "Verizon Wireless said in a news release that its overcharges were inadvertent." Inadvertant? Really? If anyone believes that, I have a bridge for sale. Never assume incompetence when greedy self-interest will explain.

If your "mistake" makes you money, I'm not going to believe it's a mistake without proof. And even after the fine, it looks like they made money on the deal.

Re:An insult of a fine

[nosferatu1001]

Do you not have any form of Unfair contract terms acts in the US, or anything at all consumer protection wise? What about fraud statutes?

Re:An insult of a fine

[Myopic]

Exactly. It could be considered a "mistake" until the first person complained about it, which was absolutely positively on the first day of the first billing cycle. Every single day after that, it was intentional fraud, and I can imagine no compelling counterargument.

Re:An insult of a fine

[Chowderbags]

But in this, you are still neglecting that corporations are not sentient beings and they cannot make decisions or operate on their own.

Which is why corporate personhood is bullshit to begin with.

Re:An insult of a fine

[ElSupreme]

T-Moblie FTW! No contract pricing and my coverage in ATL is better than all my iPhone friends.

Re:An insult of a fine

[powerlord]

It probably tries to dial out on occasion to upload information.

If you're phone line is in use a lot, or off the hook (or some other reason that the box doesn't get a dial-tone), then the box can't "phone home" as frequently as the central office is expecting.

I bet, if the box doesn't phone home frequently enough, the system automatically generates an alert, which triggers the charge, even if the box is connected.

This is all speculation, but seems about right.

Re:An insult of a fine

[KshGoddess]

12 months? 24 months is the "industry standard" to reduce churn. And many times a very large termination fee, especially if you got a really nice phone package free.

Re:An insult of a fine

[shadowfaxcrx]

This is the same utter BS that the Republicans have been trying to convince us of for over 3 decades.

I'm not going to bother dissecting your post point by point, but I will make a couple observations:

First, Verizon isn't making the public whole. That's the whole point of Sonny's post. They're paying back less than a third of the *conservative* estimate of what they stole. That sounds like a great arrangement to me. Hell, I'd be happy to rob 30 grand from a bank, and then give them 10 grand back and have the case be dropped. That's a great way to make a quick 20 thou. Funny how Verizon gets away with it, but I'd be in jail for decades.

Which brings me to my second: What was that you were saying about being fair in our judicial system and criminal prosecution?

Then you bring up the tired old Republican line of "Fines are REALLY punitive and REALLY teach corporations lessons." That's a load of crap. Microsoft made $6.66 BILLION in pure profit in Q42009. If they commit a crime and we fine them even a hundred million, which is a level of fine we almost never see levied on corporations, they will earn it back in about a day and a half. That's not a penalty. It's a minor annoyance.

The idea that fining corporations will make them behave is total crap, as has been proven by the bevy of corporations who illegally screw their customers despite the "awful, damaging fines."

Re:An insult of a fine

[shadowfaxcrx]

Bull. They just have to go through the back door, as Rove has done by forming his own corporation which runs ads on behalf of the politicians he chooses. Sure, the money never actually passes through the politician's hands, but it's used exclusively for his benefit.

http://articles.cnn.com/2010-01-21/politics/campaign.finance.ruling_1_corporate-campaign-spending-supreme-court-money-into-election-campaigns?_s=PM:POLITICS

Re:An insult of a fine

[Shakrai]

Yup, and pay a $400 early termination fee. Man, that'll really teach Verizon a lesson!

And whose fault is it that you signed a long term contract? Did Verizon hold a gun to your head or something? T-Mobile offers post-paid service without contracts. There's a number of pre-paid options available from all of the major carriers and their MVNOs.

Re:An insult of a fine

[Shakrai]

How about contracts you can't get out of for six or twelve months?

If you signed such a contract you have no one to blame but yourself. Honor the agreement that you presumably made in good-faith or pay the penalty that you agreed to for breaking the agreement. Seems simple enough to me.

Re:An insult of a fine

[Man Eating Duck]

Decision to make an extenal button (that is easily pressed by mistake) start the per-kilobyte billing? Your call on that. I know what I think.

And you're right. I had a SE W880. That little button on the left, second from the top, took you online. There was no way to disable it, even if the phone's other special buttons were programmable.

This is a small phone with small buttons, and the raised Internet button is between 'OK' and 'Back'. I accidentally pressed that button constantly, if this was not intentional it was a usability error of epic proportions. What's more, if you pressed the button again with the home page open, it would *reload*. Yes, seriously. Sony Ericsson wouldn't do anything like that by mistake, and as the handset manufacturers collaborate closely with the service providers, it's very probable that they got a kickback for it.

I finally found that you can hack (yes, it was not trivial) the browser's home page url to point to a local image. The issue was still an annoyance, but no longer a costly one.

Re:An insult of a fine

[noidentity]

Hmmm, now I wonder whether the bogus "two bags of trash outside the trash can without pre-paid stickers" $16 charge on my utility bill this month is similar, as I've never put any bags of trash outside the trash cart. I almost didn't notice it, as my electric usage was about the same amount lower than last month. That prompted me to go back through the past few years' of bills to be sure this hadn't already happened without me noticing it.

Re:An insult of a fine

[The Wild Norseman]

Sure there are. Good luck in getting it applied in your favor if you're not a mega-corporation like Verizon.

Re:An insult of a fine

[Golddess]

While I've never seen it in the news, I know someone who claimed that a former ISP they subscribed to went out of business because they routinely "forgot" to bill their customers.

Re:An insult of a fine

[The Wild Norseman]

You made a blanket statement that "...you could walk away from Verizon at any point..." which is true but considering the vast majority of cell phone users do have contracts, this walking away also has a steep cost. Exactly as is planned and counted upon by Verizon and all the other cell phone companies. Also, even though it's been deemed legal, I think the elements of "meeting of the minds" and "undue influence" should be revisited in relation to contract law and cell phone companies. More and more, I believe that there is no equal footing when it comes to these kinds of contracts (which also applies to employment, but that's a subject for a different thread).

Re:An insult of a fine

[Shakrai]

this walking away also has a steep cost

Then perhaps you shouldn't have signed that contract? There are alternatives if having that freedom of action is important to you.

Also, even though it's been deemed legal, I think the elements of "meeting of the minds" and "undue influence" should be revisited in relation to contract law and cell phone companies. More and more, I believe that there is no equal footing when it comes to these kinds of contracts

Then don't sign them. See how easy that is?

Re:An insult of a fine

[mcgrew]

Similar to my razor -- never assume incompetence (or error) when greedy self-interest will suffice.

If you're getting screwed, greed and malice are pretty much interchangable.

Re:An insult of a fine

[treeves]

and real life examples: http://www.networkworld.com/newsletters/sec/2002/01467137.html (yeah it's old; probably easier to get caught now since there is history...)

Re:An insult of a fine

[mcgrew]

"Never attribute to stupidity that which is adequately explained by greedy self-interest." - mcgrew's razor

Never trust an amoral entity.

Re:An insult of a fine

[mcgrew]

I would have liked to see the CEO of that mining company who owned the mine that had the explosion that killed two dozen miners last Spring in prison for negligent homicide; they had been repeatedly fined for the very thing that caused the explosion.

It's legal for a corporation to kill people for money.

And I'd like to have seen Sony's CEO in prison for rooting my computer with that XCP malware. If I rooted Sony's computers you can bet your wife's ass I'd be in prison.

Re:An insult of a fine

[Danse]

this walking away also has a steep cost

Then perhaps you shouldn't have signed that contract? There are alternatives if having that freedom of action is important to you.

I think the point is that when you sign the contract you don't believe that you're giving them permission to add fraudulent charges to your bill. Of course you can't alter the contract either, as there is no negotiation of terms, so one could wonder if it truly is a binding contract at all. Yet you still are forced to pay a large fee if you cancel that contract, regardless of whether they committed a fraudulent act or not. It's utterly one-sided.

Re:An insult of a fine

[Shakrai]

If you can prove the charges were fraudulent why don't you sue them for your damages?

Oh, that's right, you can't, you just see big scary evil corporation.

Re:An insult of a fine

[Danse]

If you can prove the charges were fraudulent why don't you sue them for your damages?

Oh, that's right, you can't, you just see big scary evil corporation.

Not just big scary evil corporation, but also big scary legal system that can bankrupt you long before you finally get an actual verdict, years later. If you want to be buried for years in a lawsuit you can't afford to lose, then sure, go right ahead and sue them. They can afford a hundred lawyers for every one of yours. Have you ever experienced suing a large corporation?

Re:An insult of a fine

[paganizer]

Damn. /. gave me no indication that the post had been accepted; i refreshed the thread, it wasn't there. i waited a couple of minutes, still not there.

Sorry.

Re:An insult of a fine

[WNight]

During the time you waited to collect your $6000 in rebates they overcharged you at least $15000.

I can think of at least one reason they sat on it. It's a great retention strategy.

I wonder if there are any emails floating around the office that put it in so many words... If a disgruntled AT&T employee is reading this - here's your chance for a handy leak. Anonymously send the parent poster your boss's email telling you and your coworkers to use these tactics. (Even if you're in a different department - it'll be enough to get the ball rolling.)

Re:An insult of a fine

[sumdumass]

Good lord, do you really think that the only way for the public to be fleeced is for a C level executive to give written orders to do it?

How in the world did you even remotely get that idea from what I wrote? I would think the words CEO and Board member would have made enough sense that you couldn't possibly think I was limiting my point to that. And no where did I say anything about written orders, the closest I came to was proof which shouldn't be limited to just that.

Here's a scenario: John the CTO goes down to the billing engineers and tells them, verbally, "we want to see a 5% increase in profits from spurious charges. Make it happen."

This isn't written down anywhere. The meeting happened, but it was just a generic meeting with the team - nothing special, nothing permanent. Other business was covered too. How do you prove he said that?

And why would you need written orders? The testimony of two or more, hell just one person for that matter would have be enough proof. I mean why is it that I can say I saw the guy pull a knife, stab the man in the chest, then take off running with the knife and be enough evidence for a conviction of murder and somehow a billing tech can't say he was verbally told these exact words? You prove that he said it by the fact that there is a dead body and you saw the murder happen. In other words, you prove that it happened by the fact that a crime was committed and you were a witness to the events.

BTW, Charges doesn't always mean punished or convicted. Just as the murder may have been somehow justifiable, so could some other act given the right circumstances.

Here's an even more common scenario: Joe the CEO tell John the CTO, "We're making money hand over fist. I want to make even more. Make it happen." So John the CTO runs his billing engineers ragged, and randomly weird charges and weird discounts start cropping up in people's phone bills. He throws fits about the weird discounts, they get fixed, but the weird charges - well, nobody really cares about them in the billing department, that's accounting's job.

So you are saying that it wasn't any specific purpose to increase erroneous charges but a byproduct of a crappy business mindset. Ok, where's the men rea? You see, if no one is specifically guilty of a crime but the other all actions constituted a crime, then the company is liable for the act but seeing how no one specifically set out to commit the act, a person isn't. I have no problem with not charging a person when they did nothing intentionally wrong and only charging the company being represented. It the billing engineers made an couple honest mistakes that ended up in erroneous charges being made, the wrong should be made right, but I can hardly see where they should be put to death or anything. And yes, there are already some pretty strict standards when it comes to billing for services so if they broke any other law in the process, it would be the billing engineers fault not the guy who said "we are seeing too many fantom credits, make it stop" (which is a legitimate business concern).

I mean, how do you think horribly defective products like the Ford Pinto make it to the market? Most of the time, it's not because the people engineering them suck - it's because management, up above them, is driving the engineers too hard.

You should probably look into the Ford Pinto case a little better before attempting to make it some poster child argument. Here are some facts about it that you should probably know. 1:, the gas tank location was common on a lot of cars at the time. 2:, the cost benefit analysis was done after the initial complaint of the problems and was done in compliance with excepted law at the time. It was done in order to respond to a NHTS inquiry which also sided with ford. (

Re:An insult of a fine

[sumdumass]

Corporations are conglomerations of people who take no active role in the daily operations of it. It only makes sense that the corporation is capable of acting on it's own behalf in this regard. But as I mentioned earlier, the people running the corporation are responsible for their own actions (including any owners who may be running it).

Re:An insult of a fine

[sumdumass]

This is the same utter BS that the Republicans have been trying to convince us of for over 3 decades.

Hmm.., It's been around for over three decades and yet the democrats haven't made it true by now. Let me guess, you are a lone wolf crying in the night to fix the injustices of the world and no one is listening? Or perhaps it's more like you are very confused and don't know what you are talking about?

I'm not going to bother dissecting your post point by point, but I will make a couple observations:

Why yes, cause details would only cloud the issue and weaken your mindset. You have convinced me, I'm with you now, lets ignore the entire point being made in order to foster out own misinterpretations and maintain our political agenda.

irst, Verizon isn't making the public whole. That's the whole point of Sonny's post. They're paying back less than a third of the *conservative* estimate of what they stole. That sounds like a great arrangement to me. Hell, I'd be happy to rob 30 grand from a bank, and then give them 10 grand back and have the case be dropped. That's a great way to make a quick 20 thou. Funny how Verizon gets away with it, but I'd be in jail for decades.

According to the FCC, they are being made whole. At least whole enough for what they were caught doing. Sonny's post is irrelevant as it makes up some arbitrary number and doesn't include charges already paid back or negated by Verizon customer contesting the billings. The FCC had access to that information, Sonny doesn't. Your and Sonny's hypothetical only exists as a hypothetical situation that may or may not have happened within the confines of it. You are essentially using a false analogy in order to paint a picture that doesn't exist.

Which brings me to my second: What was that you were saying about being fair in our judicial system and criminal prosecution?

Well, your first point was so flawed that I'm not sure if your second one can be remotely valid but lets see anyways.

Then you bring up the tired old Republican line of "Fines are REALLY punitive and REALLY teach corporations lessons.

Yes, that's right, it's all the republicans and not the democrats who held control in several years of the last 3 decades. I know, I know, with control of both the house or representatives, the senate, and the white house, they still cannot get anything done because of those evil republicans. And this is true even back in 1976-79 when Carter had both houses and the white house and again in 1992-1996 when Clinton had it too. Funny thing is that I don't remember any bills that the democrats purposed that was shot down by either party addressing this. Perhaps you shouldn't be tilting at windmills in Holland?

Microsoft made $6.66 BILLION in pure profit in Q42009. If they commit a crime and we fine them even a hundred million, which is a level of fine we almost never see levied on corporations, they will earn it back in about a day and a half. That's not a penalty. It's a minor annoyance.

And that's why fines aren't the only thing that happens when someone breaks the law. The people who broke the law can be held criminally liable for their actions as well as sanctions can be placed on the company. And all this doesn't negate the fact that restitution to the public can be ordered on top of the fine. But hey, it's not like it's the republican's fault when a liberal court in a democrat controlled state like California settles restitution as a coupon or discount in future purchases of Microsoft's products.

Here is a hint, even if you do have a valid argument on the penalties not being severe enough, you are loosing it completely by attempting to blame it on one political party. Something else you are not considering is the way the companies

Re:An insult of a fine

[Shakrai]

Translation: I can't prove shit but I'm going to accuse them of acting fraudulently anyway.

Re:An insult of a fine

[Hognoxious]

Do you not have any form of Unfair contract terms acts in the US, or anything at all consumer protection wise?

Regulations? That's a heck of a slippery slope to step onto. One minute you make fraud illegal, and before you know it everyone has to have a mandatory RFID chip inserted at birth.

No, sir, you yoorpians can keep your commyernissum.

Re:An insult of a fine

[Hognoxious]

It's actually to stop you using it outside the UK. Expats can buy the same service - but it costs about twice as much.

Re:An insult of a fine

[Danse]

Translation: I can't prove shit but I'm going to accuse them of acting fraudulently anyway.

You have no proof of anything either, just your flip remarks. I'm not giving legal advice either. If you want to sue one of the big telecoms, go talk to a lawyer. There have been plenty of cases of people suing large companies. If you're lucky, they'll brush you off with a small settlement. If it's something like this, that affected millions, then they don't want to set a precedent that would encourage others to sue as well, so they'll bury you in legal paperwork until you can't afford to go on.

Re:An insult of a fine

[Shakrai]

Ah, but I'm not the one trying to claim that fraud happened, now am I? I suppose backing your claims with evidence is too much to ask for?

Why the hell would someone want to sue Verizon over a $1.99 fee that was (in my experience) refunded without any hassle when the customer complained about it?

Re:An insult of a fine

[Danse]

Ah, but I'm not the one trying to claim that fraud happened, now am I? I suppose backing your claims with evidence is too much to ask for?

Why the hell would someone want to sue Verizon over a $1.99 fee that was (in my experience) refunded without any hassle when the customer complained about it?

So you don't see it as a problem that Verizon is just tacking fees onto people's bills for no legal reason? They've admitted that the fees aren't legitimate. You think it's ok for them to continue doing that to other customers just because those customers didn't notice the fee, or didn't know what the fee was and assumed it was another government-sanctioned charge? If so, then you're supporting fraud. Once Verizon knew about the charges from those who were disputing them, it was their responsibility to ensure that they were not overcharging their customers. They didn't do that. That's where the fraud comes in.

Re:An insult of a fine

[Shakrai]

The fees are legitimate. Read the contract you signed. Verizon bills you $1.99 per MB of data, rounded up. You knew that going in, or at least you should have if you bothered to read the agreement that you signed.

What's not legitimate is that the fees were applied towards data that was supposed to be free. Verizon has a bunch of data categories (backup assistant, My Verizon, OTA software updates, etc.) that aren't supposed to be billed but wound up being billed anyway for one reason or another. I've heard explanations ranging from billing system issues (it's worth noting that it wasn't that long ago that Verizon finally got a unified billing system, previously each market had it's own billing system) to software glitches on the phones themselves.

Either way, it's a huge leap from "billing system and/or software bugs" to "fraud" and it would be less inflammatory if you could back up such an accusation with proof. Of course you can't do that -- you are just assuming that because they are "big scary evil corporation" that this was some deliberate attempt to screw people over rather than an honest mistake.

Re:An insult of a fine

[Danse]

The fees are legitimate. Read the contract you signed. Verizon bills you $1.99 per MB of data, rounded up. You knew that going in, or at least you should have if you bothered to read the agreement that you signed. What's not legitimate is that the fees were applied towards data that was supposed to be free.

So first you say the fees are legitimate, and then you admit they aren't, because the customers shouldn't have been charged, but got charged anyway. Seriously man, the mental gymnastics you are engaging in to try to justify this are just making you look silly. They were adding charges to people's bills that they should not have been adding. How much more clear can it get? Those charges are in no way legitimate.

It's not a huge leap at all once it was clear that people were being charged for things they shouldn't be charged for. At that point it's obvious that there's a problem with their billing and they should have been correcting it for everyone, not letting it ride and just fixing it for people that complain. That's the fraud!

Re:An insult of a fine

[h00manist]

Does the term 'vendor lock-in' mean anything to you?

Indeed at the time I was paying lists of "fees" on each and every of my bills, there was no number portability, changing companies meant changing numbers. Prices on all companies were high, and all had contracts upon sign-up. And all kinds of companies had these fees. I suppose they still exist in some companies.

Re:An insult of a fine

[Shakrai]

I'm not justifying anything, I'm only calling BS on your unproven accusations of fraud. Fraud:

deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.

Unless you can prove that Verizon deliberately did this there is no "fraud" here. Billing errors != fraud

Re:An insult of a fine

[Danse]

I'm not justifying anything, I'm only calling BS on your unproven accusations of fraud. Fraud:

deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.

Unless you can prove that Verizon deliberately did this there is no "fraud" here. Billing errors != fraud

I'm not saying they deliberately did it. I'm saying that once they realized it was happening, they deliberately allowed it to continue, and did nothing to even warn their customers about the possibility of an overcharge on their bill due to problems with their billing system, but instead just continued to collect the money and say nothing. By any definition you care to cite, that's fraud!

Re:An insult of a fine

[Shakrai]

they deliberately allowed it to continue

Again, you make claims with no evidence to back them up.

and did nothing to even warn their customers about the possibility of an overcharge on their bill due to problems with their billing system

It's your own responsibility to review your bill for accuracy.

but instead just continued to collect the money and say nothing

Actually, they eventually fixed the problem with their billing system and agreed to offer refunds to the impacted customers. I've not personally observed this problem in over a year. I suppose you are entitled to keep believing that they "did nothing" if that better fits into your ideology though :)

Re:An insult of a fine

[Danse]

they deliberately allowed it to continue

Again, you make claims with no evidence to back them up.

Did they know about the errors? Yes. Did they fix the problem? No. Did they warn their customers that they were having billing issues? No. There you go.

and did nothing to even warn their customers about the possibility of an overcharge on their bill due to problems with their billing system

It's your own responsibility to review your bill for accuracy.

So you're saying they aren't responsible for alerting customers when they know they have a billing problem that could affect them? They aren't responsible for sending accurate bills to their customers? How come in your world we're supposed to be responsible for our actions, but corporations aren't responsible for their actions? They were the ones overcharging people and keeping the money.

but instead just continued to collect the money and say nothing

Actually, they eventually fixed the problem with their billing system and agreed to offer refunds to the impacted customers. I've not personally observed this problem in over a year. I suppose you are entitled to keep believing that they "did nothing" if that better fits into your ideology though :)

Yes, they eventually fixed the problem. The problem is that they never told their customers they had a problem, even though they knew they did. It only took them several years and an FCC lawsuit to fix it. Meanwhile we only have their word to go on that they're refunding the proper amounts to everyone that should get a refund. I'm wondering why it took so long, and why they didn't start refunding these charges to everyone years ago if they know who these 15 million people are. And this is just covering this specific type of billing issue. They are still being investigated for others. But I guess in your world corporations are just benevolent organizations with their customers' best interests at heart, and would never do anything remotely dishonest. Right?

Re:An insult of a fine

[Shakrai]

They were the ones overcharging people and keeping the money.

Except they refunded the money.

So you're saying they aren't responsible for alerting customers when they know they have a billing problem that could affect them?

I said nothing of the kind, all I said was that it's your responsibility to review your bill for accuracy.

Meanwhile we only have their word to go on that they're refunding the proper amounts to everyone that should get a refund

If you think they are lying you have a remedy through a civil lawsuit and the discovery process. Otherwise it's just another unproven accusation.

Re:An insult of a fine

[Danse]

Except they refunded the money.

Years later, after they got sued by the FCC.

I said nothing of the kind, all I said was that it's your responsibility to review your bill for accuracy.

What does that have to do with anything? You're trying to pin the blame on Verizon's customers. Millions of them got overcharged and Verizon didn't say a damn thing about it for years. You're really straining to try to make them seem innocent on this one when it's plain as day that they didn't do the right thing. Honesty is the right thing. When you're taking money from people that isn't rightfully yours, and you know it, that's stealing. That they continued to do this for years without telling anyone is just wrong. You can try to split hairs all you want, but anyone with any sense of ethical behavior knows that this is wrong.

Meanwhile we only have their word to go on that they're refunding the proper amounts to everyone that should get a refund

If you think they are lying you have a remedy through a civil lawsuit and the discovery process. Otherwise it's just another unproven accusation.

First, I didn't make an accusation there. Second, it's a true statement. And finally, such a civil suit would take years and more money than I'll see in a lifetime to have any hope of success. You're deluded.

Re:An insult of a fine

[Shakrai]

Years later, after they got sued by the FCC.

They refunded it instantly for the people who bothered to read their bills and disputed the charges.

You're trying to pin the blame on Verizon's customers.

They share part of the blame if they can't be bothered to review their bills for accuracy.

You're really straining to try to make them seem innocent on this one

Keep putting words in my mouth. I've just disputed your claims that they committed fraud. You still can't back up those claims with actual evidence of wrongdoing so I'm not going to waste any further time trying to debunk them.

Re:An insult of a fine

[Danse]

I've just disputed your claims that they committed fraud.

No, you've utterly failed to explain how knowingly keeping money from illegitimate charges against millions of customers for several years without saying anything to them about it is not fraud. It doesn't matter that they paid it back years later after they got sued by the FCC. That's like saying that robbing a bank isn't a big deal as long as you give the money back after the cops catch you.

Re:An insult of a fine

[Shakrai]

If Verizon had a way to determine the legitimate from illegitimate charges you would have a point. As I explained in my earlier post they had no real way to separate legitimate data charges (mobile web browsing, application downloads, etc.) from charges for data that was supposed to be "free" (backup assistant, my verizon, etc.)

That was the whole crux of the problem. They got the idea of billing $1.99/MB for data (previously data sessions used plan minutes) and sometime after the fact decided to give away some of that data for free. On the previous plans all data incurred minute charges. On the new plans some data was supposed to be free, but it took them awhile to iron out the kinks in their billing system.

You can keep living in your world where this was a deliberate attempt on the part of Verizon to commit fraud but I'm taking you less and less seriously as you continue to decline every invitation to back up your accusations with proof.

Re:An insult of a fine

[Danse]

First of all, if they couldn't determine which were legitimate and which were not back then, how are they suddenly able to do it now I wonder?

Let's assume that you're right about that. If they couldn't tell who to charge and who not to charge, then they sure as hell should have warned their customers. They didn't. They just kept the money for years and said nothing. There's no way that that's not fraud. You say I don't have proof, but the proof is precisely the fact that they kept it under wraps. It's plain as day that they didn't even make an attempt to do the right thing. Your moral compass is just so fucked up you can't seem to see it. Give me one good reason why they didn't warn their customers that they couldn't tell who to charge and who not to charge and that people needed to check their bills? In what fucked up moral system is that ok?

Re:An insult of a fine

[Shakrai]

You assume that "they" had any clue what was going on. Ever worked for a large corporation? Do you honestly believe this problem was on management's radar at the beginning? You have a handful of customers that are complaining about a $1.99 charge. The vast majority of those charges WERE legitimate (data usage for application downloads and web browsing).

Verizon could have avoided this whole mess if they had simply treated all data the same. For better or worse they decided to give some of it away for free. It worked fine for most customers but their billing system wasn't completely up to the task and some customers got charged when they shouldn't have been. Those people have now been made whole.

I'm at a loss to understand why you think this was deliberate fraud, other than your ideology and hatred of all things corporate.

Re:An insult of a fine

[Danse]

I'm at a loss to understand why you think this was deliberate fraud, other than your ideology and hatred of all things corporate.

Now who's engaged in baseless accusations? I don't hate all things corporate. I work for a large corporation! I just want to see accountability from corporations, which is seriously lacking, which we've seen in case after case for years.

You assume that "they" had any clue what was going on. Ever worked for a large corporation? Do you honestly believe this problem was on management's radar at the beginning? You have a handful of customers that are complaining about a $1.99 charge. The vast majority of those charges WERE legitimate (data usage for application downloads and web browsing).

I have, and I do, and I have friends and relatives that do as well. It still doesn't make sense that they didn't know this was going on. If it took them more than a year to realize it (which I consider to be ridiculously long, especially when customers were calling in repeatedly about these charges), they still went years longer without telling anyone as they continued to do it. The excuses you're making for them just don't make sense. At some level, someone decided not to tell anyone about these overcharges. We can speculate about when and by whom that decision was made, but Verizon is responsible for the decision not to warn their customers that they were incapable of determining the correct charge for their customers.

Re:An insult of a fine

[Shakrai]

I just want to see accountability from corporations, which is seriously lacking, which we've seen in case after case for years.

What kind of "accountability" do you think is called for here? They refunded the money that people were incorrectly charged. They paid an eight digit fine for their transgressions. What more should happen?

At some level, someone decided not to tell anyone about these overcharges.

Another charge for which you offer zero proof. Yawn.

Re:An insult of a fine

[Danse]

I just want to see accountability from corporations, which is seriously lacking, which we've seen in case after case for years.

What kind of "accountability" do you think is called for here? They refunded the money that people were incorrectly charged. They paid an eight digit fine for their transgressions. What more should happen?

When it comes to accountability, how about proof that they actually know who they overcharged and how much? Your entire argument is that they couldn't tell the difference, but suddenly with this settlement, they know exactly who and how much? All too often the punishments for things like this are smaller than the profits made through them, and that doesn't even consider the fact that they got to keep the money for several years. That's a lot of time for investment returns.

At some level, someone decided not to tell anyone about these overcharges.

Another charge for which you offer zero proof. Yawn.

Exactly how much proof do you need? Which point are you disputing?

1. They overcharged millions of customers
2. At some point, they realized they had a billing problem because thousands of errors had been reported
3. Somebody, at some level of management knew about this problem
4. Nobody, at any level, ever warned their customers

So you must be claiming one or more of the following things:

• They didn't overcharge
• They never realized they had a problem, despite all the complaints
• The problem was never brought to the attention of anyone in management
• They warned their customers about the problem

I'm just not seeing how any of those are possible.

Re:An insult of a fine

[Shakrai]

Your entire argument is that they couldn't tell the difference, but suddenly with this settlement, they know exactly who and how much?

This is the third or forth time you've implied that they aren't acting in good faith with regards to these refunds. Do you have any evidence of this or do you simply believe in "guilty until proven innocent" for corporate transgressions?

All too often the punishments for things like this are smaller than the profits made through them

"All too often"? Way to generalize!

Exactly how much proof do you need?

I want proof that this was a deliberate effort on Verizon's part to screw people over. You can't offer such proof because you don't have it. Your main point of contention seems to be the fact that they never notified their customers about this issue and that somehow proves fraud. You have no timeline for when management became aware of the problem nor do you have a timeline for when the problem was fixed. It would seem to me that you would need that information before you can level a fraud charge based on the lack of notification.

Re:An insult of a fine

[Danse]

Your entire argument is that they couldn't tell the difference, but suddenly with this settlement, they know exactly who and how much?

This is the third or forth time you've implied that they aren't acting in good faith with regards to these refunds. Do you have any evidence of this or do you simply believe in "guilty until proven innocent" for corporate transgressions?

Nothing else they've done in this situation can be construed as "in good faith". They didn't even bother to warn their customers, why should we take them at face value? I'm asking for accountability, not assurances. You don't seem to understand the difference. You said they couldn't tell what charges were legit or not. We already know they're guilty of overcharging for years and not telling anyone. I'm saying let them prove that they actually know who and how much they overcharged, since it seemed to be such a huge mystery to them. That's called accountability. What you're suggesting is that we let them throw out a number and just accept it. In what universe would that idea fly? Maybe I can convince the IRS that my underpayments were just an oversight and I'll pay them what I think I owe them. No need to actually verify anything.

Exactly how much proof do you need?

I want proof that this was a deliberate effort on Verizon's part to screw people over. You can't offer such proof because you don't have it. Your main point of contention seems to be the fact that they never notified their customers about this issue and that somehow proves fraud. You have no timeline for when management became aware of the problem nor do you have a timeline for when the problem was fixed. It would seem to me that you would need that information before you can level a fraud charge based on the lack of notification.

So your theory is that they were unaware of the problem for all those years until they got sued? Wow. I'm surprised we don't hear more stories of Verizon execs accidently stabbing themselves in the eye with their forks. Your theory calls for them to be dangerously retarded. I wonder if they're aware they work for a large corporation, or if they just sit in their offices playing with markers and post-it notes.

If your best excuse for them is that they are so unimaginably incompetent that they went for years hearing these complaints from their customers, but yet were completely unaware that they had a problem, then I really can't argue with you further. I find that excuse ridiculous, but then I don't share your bizarre worldview where corporations are so impeachably honest in all their dealings that to even question them is some sort of heresy. Good luck with that.

Re:An insult of a fine

[Shakrai]

I'm asking for accountability, not assurances.

And you've received it. The affected customers are getting refunds. Verizon paid $25,000,000 to the US Treasury. I'm sorry if that isn't good enough for you.

Re:An insult of a fine

[Danse]

I'm asking for accountability, not assurances.

And you've received it. The affected customers are getting refunds. Verizon paid $25,000,000 to the US Treasury. I'm sorry if that isn't good enough for you.

So where's the proof from them that they actually know these supposedly long-unknowable facts about the overcharges? If they're as incompetent as you're implying, then I don't see how we can have any confidence at all in their ability to determine an accurate figure.

Re:An insult of a fine

[Shakrai]

The refund that I received was accurate. Actually it was 'inaccurate' in that they had already given me credits for these charges but it was 'accurate' in that they properly credited me for all the fees I was charged plus the taxes on those fees.

YMMV of course. If you were an affected customer and the refund doesn't match up with what you were charged then dispute it with VZW.

No article?

[twistofsin]

Why aren't there any links to the article the summary is referring to?

Re:No article?

[Shakrai]

Here's one article, though I'm not sure if it's the one the submitter was quoting from.

Re:No article?

[Anonymous Coward]

Indeed.

link to article

Verizon also promises...

[Samantha Wright]

"...We promise we won't get caught next time."

I'd RTFA

[morgan_greywolf]

But, apparently, there is no FA to R. Way to go. tim-mahy!

Re:I'd RTFA

[Monkeedude1212]

Maybe that's all the relevant info from the article and they spared us the rest.

Re:I'd RTFA

[Anonymous Coward]

If this was any other site the note about missing link would be before the 'first post' posts. On /. nobody even notices apart from this one guy that must be new here.

Re:I'd RTFA

[Anonymous Coward]

My hobby (xkcd style):
Mentally tagging events, texts, thoughts etc the way /. would.

Didn't even notice the lack of an FA (I guess that's an indication I'm ready to get an account and stop posting as AC), so... andnothingofvaluewaslost

Re:I'd RTFA

[Anonymous Coward]

Maybe that's all the relevant info from the article and they spared us the rest.

You must be new here.

Well, duh.

[Oxford_Comma_Lover]

> Verizon Wireless said in a news release that its overcharges were inadvertent.

Also, Bank of America is kindhearted and bankrolls Santa's elves.

Re:Well, duh.

[Manos_Of_Fate]

(Score:3, Informative)

I love you, Slashdot.

Re:Well, duh.

[lanner]

This isn't a small company here. This is VERIZON. They have ass-loads of people working all day long figuring out billing trends and analyzing where their profits come from. To feign ignorance is impossible... and irrelevant. "Oops we committed fraud" should not work, but apparently does when you are a corporation. I'll have to try that some day when I appear before a judge and try to use BS like this as precedent.

Inadvertent my ars

[Anonymous Coward]

My brother-in-law was on Verizon for years. Each of his phones had a button which connected to the Verizon store where you would go to buy games or ring tones or whatever. My T-Mobile phones always had t-zones buttons; same thing, no big deal. Except for on Verizon, if you didn't subscribe to a data plan, every time you pushed that button, whether intentional or not, your phone initiated a data connection to Verizon and you were hit with the $1.99 fee. I know this because every month he would call Verizon and dispute the charge and they would give him the run around for a while before apologizing and crediting his account for the charges. Because he was under contract, this continued for 2 years. I think Verizon should pay him for the many hours of his life he spent arguing on the phone with their customer service reps trying to get these charges reversed.

On an related note, he is now on T-Mobile (free mobile to mobile calling, woot!)

Re:Inadvertent my ars

[LurkerXXX]

Same thing happened to me. I eventually asked them to just disable the data service for my plan because I'd decided to never use it the way they kept screwing me over. I still kept getting the charge even though I'd called and had the service 'disabled' on the account... several times.

Screw Verizon. I'm with Sprint now and never intend to use Verizon again.

Re:Inadvertent my ars

[hedwards]

Ouch, even AT&T isn't that bad. I think the most I've ever gotten charged for that sort of fat fingered mistakes was a few cents for the bandwidth. Don't get me wrong it was an outrageously large sum of money for the mistake, but far cheaper than 2.99.

Re:Inadvertent my ars

[Shakrai]

Screw Verizon. I'm with Sprint now and never intend to use Verizon again

You realize that Sprint roams on Verizon's network and you are "using" them every time you step out of Sprint's limited footprint, right?

Re:Inadvertent my ars

[commodore64_love]

>>>I think Verizon should pay him for the many hours of his life he spent arguing on the phone with their customer service reps trying to get these charges reversed.

Well if your brother really feels they owe him something, say $50, then he could just steal a Verizon phone worth that value. Like how Robin Hood used to do (steal from the rich to return the money they had stolen from the poor).

Re:Inadvertent my ars

[LurkerXXX]

But they don't get a chance to overcharge me for the privilege for it.

Re:Inadvertent my ars

[Anonymous Coward]

You do know Verizon's "network" map shows all their roaming partners, right? That's why you get signal in the middle of nowhere, because small roaming cellphone companies have agreements with the big boys.

Right. "accidental".

[sloth jr]

If it was accidental, why didn't they voluntarily hand those "accidental" fees back? Why'd a third party have to force them to settle? Btw, here's the link to the referenced source: http://voices.washingtonpost.com/posttech/2010/10/the_federal_communications_com_5.html

Re:Right. "accidental".

[The Wild Norseman]

Exactly. "Oh, I overcharged you a thousand dollars and this judge told me I had to pay you back. Here, have three bucks. Sorry 'bout that."

So tell me again how Verizon is better?

[Anonymous Coward]

For all those people who claim Verizon is better, it's time to wake up. All phone carriers are out to screw you. It's in their DNA. Thank goodness for number potability, so that we (the customers) can take our numbers and move it. To keep the carriers honest, everyone should change carriers every year or two. Maybe that will get them to "care" about customers.

Re:So tell me again how Verizon is better?

[Lead Butthead]

For all those people who claim Verizon is better, it's time to wake up. All phone carriers are out to screw you. It's in their DNA. Thank goodness for number potability, so that we (the customers) can take our numbers and move it. To keep the carriers honest, everyone should change carriers every year or two. Maybe that will get them to "care" about customers.

So you play musical chair annually. How does that solve the problem? Without real competition all you're doing is paying these carriers to screw you. Don't matter which one, because they all act the same.

Re:So tell me again how Verizon is better?

[f00zbll]

the reality is, there is no real competition. the best we can hope for is better customer service and slightly less dishonest billing.

Re:So tell me again how Verizon is better?

[ewieling]

In my experience, in the areas where I live and travel, Verizon's billing and customer service are just as horrible as the other carriers. The difference is that Verizon seems to invest quite a bit of money in their network. I currently use a MVNO that uses Verizon's network (most use Sprint's network).

Re:So tell me again how Verizon is better?

[Anonymous Coward]

Not me, I don't give them a dime!

*ring ring*

Now if you excuse me, someone is calling my can on the string!

Verizon: We'll pay $0.25M

[Allnighte]

"A spokesperson for Verizon has issued a report correcting the FCC, stating their settlement with the FCC was at a rate of 0.002 cents, not 0.002 dollars, bringing their total liability to $0.25M."

PROFIT!

[Anonymous Coward]

so let me get this straight

$2 per bill * 1 million bills per month = $2,000,000 per month * "years" = $72+ million

72 million - 25 million = PROFIT!

I wish I had a license to steal from people.

Re:PROFIT!

[Anonymous Coward]

TFA (not lined in /. story!) spells that out a bit more clearly;

Verizon Wireless has agreed to pay $25 million to the U.S. government and at least $52.8 million in refunds to customers who inadvertently racked up data charges on their phones over the last three years

$25m + 52.8m = $77.8m

That said, they're probably still making a profit, and I'd be surprised if they didn't at least try to give those refunds in the form of discounts on bills (so that they don't have to pay you if you've jumped ship or you're about to).

Re:PROFIT!

[tophermeyer]

I had some billing disputes with VZW in the past, and that's exactly how they did it.

As far as I can remember, the only time I've ever had a wireless company actually cut me a check was when I got back the deposit from my very first cell phone contract (I was too young to pass a credit check at the time).

Canada is worst

[Anonymous Coward]

Telcos force businesses to get the commercial packages otherwise you can get sued. Why should someone with his own company working at home have to pay the same fees as corporations with dozens and hundreds of employes?

If anyone can give me hints or any information, the damn CRTC is of absolutely no help in this matter.

Re:Canada is worst

[hedwards]

Typically you don't. You pay per line. And it does typically cost more money because they typically provide more service. Try getting a Service Level Agreement out of a carrier for home use.

Let me guess

[slapout]

25 million people each get a dollar?

Re:Let me guess

[blair1q]

No. A coupon for free text messages.

Re:Let me guess

[hedwards]

I've always found that to be moronic. When TD Ameritrade lost my contact information the settlement let them pay people with free trades. Needless to say I'd already left because of their ineptitude, leaving the settlement which was insultingly cheap in the first place completely worthless.

Re:Let me guess

[slapout]

Reminds me of when Nintendo was sued for price fixing. People got a $5 coupon for Nintendo products!

Oblig.

[ittybad]

http://www.verizonmath.com/
Quote: George Vaccaro wanted to point out to Verizon that they were saying ".002 cents" and meaning to say ".002 dollars" but he found that every single person at Verizon did not understand the difference

Audio and (I believe) transcript available. It is painful.

Grumble. telcos.

[Anonymous Coward]

Now they need to do something about the bastards at Windstream with their "non-basic service" surcharge for "basic telephone service". Oh, and destroy AT&T while they're at it. F the evil empire.

Back-handed Apology

[DaMattster]

It sounds like Verizon is giving a back-handed apology. I think Verizon customers would like an honest to god apology and an admission of wrong doing. The public doesn't honestly believe that these errors were invadvertent so why does Verizon pretend as if they do. I fully believe these "errors" in billing were purposeful attempts to gain revenue through deception. The punishment handed down is really only a slap in the face of a billion+ revenue stream.

Re:Back-handed Apology

[hedwards]

This is America, when's the last time you received an apology? Chances are if that the answer is at all recent your either a wife or living in some other land.

Re:Back-handed Apology

[Anonymous Coward]

You mean a slap on the wrist. A slap in the face would be a big thing.

Error? really?

[JustNiz]

>>> Verizon Wireless said ... 'We accept responsibility for those errors...'

Its funny how you never see any billing 'errors' where the company is the one loosing out.

Re:Error? really?

[MasaMuneCyrus]

Sure you do. My friend in Memphis, TN got a friendly letter from the Memphis Light Gas & Water utility. They kindly told him that they had inadvertently under-read his meter for three months, and that they apologize profusely.

...They then billed him an additional $300 of their lost-revenues.

Re:Error? really?

[hedwards]

My former employer was like that. They expected the employees to report all payroll errors to them, but they only reported and fixed ones that we reported or that cost them money. Hence why I no longer work for them.

Re:Error? really?

[Shakrai]

So what should have happened in your mind? They should have eaten the mistake? Something tells me that you wouldn't expect your friend to eat the mistake if the error had been AGAINST him instead of FOR him, so why should the utility be treated any differently?

Re:Error? really?

[djchristensen]

The question is, would the company have said anything if the mistake was in *their* favor (they had over read the meter), or would they stay silent and only deal with it if the customer complained?

Re:Error? really?

[djchristensen]

I know someone who had cable internet, phone and TV. They canceled the phone line (the cable co's voip was awful at the time), and somehow the internet charges were canceled as well, even though the internet connection continued to work. That went on for something like 18 months, during which service went out several times and technicians had to be called. That was one case where the unexplainable chasm between the service and billing departments was an advantage.

It all eventually came to an end when a phone service person noticed it and reinstated the billing. I think they didn't want to deal with the hassle of paperwork, so there was never any mention of payment for the previous service.

Not that I would ever want to defend a cable co, but just to show that there's at least one case where a mistake was significantly in the favor of the customer.

Re:Error? really?

[Shakrai]

They would have had to say something unless they intended to commit fraud by purposefully misreading his meter in the future. Assume the meter started at 0 for the sake of this example:

Month #1: Meter reads 1,000 kWh, customer billed for 1,000 kWh
Month #2: Meter reads 2,000 kWh, customer billed for 1,000 kWh
Month #3: Meter reads 3,000 kWh but meter reader writes down 3,500 kWh by mistake. Customer billed for 1,500 kWh
Month #4: Meter reads 4,000 kWh, meter reader records it correctly this time, customer billed for 500 kWh.

Mobile ripoff industry!

[spammeister]

Once again, this makes me so glad that I'm "off the grid" and just do a pay-as-I-go a couple months a year when I need a cell phone. Canada is a bit better than the US for outragous fees. Although I'm sure 99% of Roger's customers are unsastified.

Re:Mobile ripoff industry!

[Anachragnome]

Our family went back to a single land-line about six months ago.

Since then, I can think of exactly three instances where I wished I had a cellphone...and got by just fine without one anyways.

Compared to our previous Verizon service (which sucked ass, to say the least), we save about $600 a year.

It is also a liberating experience to be able to just tell people "Just leave a message..." when I give them my phone number. NOT having a cellphone relieves one of a certain amount of obligation that most people are not even aware they are subject to...until they are not.

Re:Mobile ripoff industry!

[Reaperducer]

Although I'm sure 99% of Roger's customers are unsastified.

Then Roger should get better hookers.

RTFA!!!

[Anonymous Coward]

Wait I can't RTFA there ain't one.

So when will they be locking up some Verizon executives for felony fraud?

Re:RTFA!!!

[Shakrai]

So when will they be locking up some Verizon executives for felony fraud?

Maybe when the people making those accusations can prove them beyond a reasonable doubt as is required in criminal prosecutions under our judicial system?

Statistical significance test

[Livius]

You know these things happen 'accidentally' because 50% of the time the error is in the customer's favour.....

Re:Statistical significance test

[Anonymous Coward]

You know these things happen 'accidentally' because 50% of the time the error is in the customer's favour.....

said who ?

Re:Statistical significance test

[jcl-xen0n]

You know these things happen 'accidentally' because 50% of the time the error is in the customer's favour.....

Haha, good point - I've personally lost count of the number of times my TelCo has given me bonus money for no good reason :}

This is total BS

[supercell]

"Verizon Wireless said in a news release that its overcharges were inadvertent" Bullshit! They should be prosecuted for fraud. If they used automatically withdrew money from peoples accounts, it should be wire fraud. If you I pulled this shit, we would be in prison.

Where does the money go?

[Anonymous Coward]

So what, are the customers being reimbursed? Of course not.

Back charges for time travelers

[Anonymous Coward]

http://idle.slashdot.org/story/10/10/28/1545230/1928-Time-Traveler-Caught-On-Film

AT&T is doing it now

[Mr. Competence]

I just got a refund from AT&T because of an issue like this with my iPhone 4. I turned all data access off (e.g. if I didn't have WIFI access I would get a dialog about cell data being off) and yet I was getting hit for 0.8MB/day while it was off. According to the AT&T person, it is because the iPhone sends out data to see if the data service is available! There are even discussions about it on Apple's site.

Obligatory movie reference

[kaoshin]

SAMIR: But that's not much money, I -

PETER: That's the beauty of it. Each withdrawal is a fraction of a cent. That's too small to notice. Take a thousand withdrawals a day, space it out over a few years, that's a couple hundred thousand dollars.

MICHAEL: Just like Superman III.

Re:Obligatory movie reference

[Anonymous Coward]

This wasn't funny. It was predictable and unoriginal.

Re:Obligatory movie reference

[Anonymous Coward]

Thanks for coming out all you whiners without mod points.

Re:Obligatory movie reference

[Anonymous Coward]

There are some really funny people on Slashdot. But the vast majority think quoting old Simpsons episodes, Office Space, or Monty Python somehow makes them funny. In that manner, they're no better or worse than most of the population.

AT&T should be next in line for mystery fees

[snowtigger]

I remember AT&T slapping on $10 of "government fees and taxes" to my $60 plan, without specifying what those fees and taxes were.

I really hope they get to pay for that one day...

"we accept responsibility"

[kimvette]

'We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills.'"

By 'accept responsibility' do they refer to the $24mil fine as merely the cost of doing business, or do they in fact plan to accept responsibility as in making the injured parties whole, by issuing refunds of past customers, and extending credits to current customers, cutting down their bills to pay back the illegal gains?

Human nature test

[Zuriel]

Have you ever complained about being undercharged for anything? If 50% of mistakes were in the customer's favour, I'd still expect 99% of complaints to be about overcharging.

serves the bastards right

[Anonymous Coward]

I got hit with this fee even after I'd turned off all data on my account. They always removed it because the account didn't have data but they still tried charging for it.

Testimonial from someone who dealt with it

[Skexis]

I personally was charged about $75 in addition to my normal bill for the first two months I had Verizon. The bill simply said "internet charges" or the even more nebulous "download: music box" as a way of explaining the extra money. My phone's default settings on all of the phone's face buttons were to get me to the internet as fast as possible, and the unlock button was the thing that protruded the most from the flat part of the phone, so at first I dismissed it as the phone getting unlocked in my pocket at work. By the second month, though, I called to complain, thinking that if I was being charged all that money for a "download," as opposed to "internet usage," I should have had a program or mp3 downloaded to my phone. I said as much to the customer service agent, and she stepped away from the phone to speak with her manager. Her response, minutes later, was to offer to take half of the charges off. I replied that I would pay for the amount if, and only if, she could tell me exactly what the hell it was that I had downloaded.

A few minutes later, and she told me that all charges would be dropped. Reading this now, I'm just sorry I didn't push harder for the first month I had already paid.

it's over 1 million!

[Anonymous Coward]

((77,800,000 / 36) / 1.99) = 1,085,986 "inadvertent" charges

77.8mil over 36 months at $1.99 per incident

Should be easier to get ATT to pay up

[djchristensen]

I've been getting hit by the ATT "$2 button" (TM) most billing periods. This Verizon settlement should make it easier to get them to refund all those back charges. What's really annoying is that to be able to use the *free* unlimited MMS messaging service I have (I have a teenager, ugh), I have to have a data plan. So I have the pay-as-you go plan, which exposes me to the cost of the inadvertent data fees (and no, it doesn't all come from the teenager, her mother and I get hit with it as, if not more, often).

Let's do some math to put things in perspective

[alexo]

Verizon Wireless reported $49.332 billion in revenue in 2008.
The median annual household income in the US in 2006 was $50,233.
The $25M settlement for Verizon is equivalent to Joe Average paying a $25 fine.
(Note that I don't count the rest, as it was just the return of stolen money)

Question #1: Is this what the average person expected to be hit with after defrauding millions of people for over 2 years?
Question #2: Will that fee affect the income of Verizon executives in any way?
Question #3: Where will the money come from?

Correct answers:
1. No
2. No
3. From the public, by raising fees and prices.

i disabled internet access on two phones...

[__aatirs3925]

I disabled internet access on two phones by calling them a few years back and any fees associated to accidentally connecting to the internet had been waived. Usually companies will wave fees especially when you're not on contract with them and you give them the "I'm going to go to..." routine. However I think this article talks about pay-as-you-go phones instead but WGAS :P

If it is a glitch why is it always in their favor?

[maxbash]

Of course this isn't enough sample of cases to definitely say this, but every error I have heard was an over charge, not a undercharge. Even though it would be cheaper to have Verizon to call our family and friends, I and my wife dumped them because we would get over charge by at least $50 about 4 times within a year. I hate seeing the bill in mail because I know I would probably be calling customer support to dispute charges we could not possibly have made. At lest the bills were never over $150 dollars. A coworker of mine got a $14,000 bill from Verizon, he didn't even have a smart phone. The explanation was that voice bandwith got charged as data, but it was also from someone eles phone. What kind of crap code is in their billing software. I wouldn't be suprised that it randomly overcharges a small percentage of people, just because it can always be attribitued as a innocent mistake. In reality enough people miss or it don't bother to dispute it that it pads their bottom line. I know about 5 other people that have been overcharged. I'm sure most of people I know would either do the honest thing and correct an undercharge, or they would brag about the money they saved. I never heard of anyone being undercharged.

Yes, actually

[phorm]

I can't really think of a time where I've been undercharged on a cellular bill. Normally I just check the total to ensure it's consistently in the same ballpark.

However there have been plenty of times when a teller at a store, etc, has screwed up and undercharged me for something (scanned it in wrong, perhaps), given incorrect change (in my favor), or missed an item. When I catch it, I'm honest. Not just because it's the right thing to do, but also because I don't want the poor pleb handling the register to catch shit for coming up short.

With cellular bills, they seem to make them as difficult to catch errors as possible. So the chances of me catching sneaky little overs and unders is pretty low unless it makes a noticeable dent in the end-sum, but none I've seen have ever been in my favor.

In other News

[innot]

starting next month Verizon will add a new " FCC Regulatory Compliance Tax* " of $1.99 to all bills.



*<supersmall><evensmaller><color ="almost-white">This is not a real tax, just a fee we need to pay for our fines</color></evensmaller></supersmall>

Re:In other News

[balbus000]

That's funny and depressing at the same time.

And

[mahadiga]

30% of this Fine should go to Govt and 70% to the Verizon Customers.

Apology, eh?

[Anonymous Coward]

I don't think your apology matters much after those customer's had to take you to court to get their money back...

Missed an implication, there.

[Toze]

We accept responsibility for those errors now that we have been caught and forced in court to do so

FTFY.

accidental data charges

[SharpFang]

"We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills. We also send a big FUCK YOU to those we purposely tried to screw for money in full awareness of making bogus charges, and make a solemn promise to get these bastards who sued us for that."

Yes, of course...

[Syberz]

Verizon Wireless said in a news release that its overcharges were inadvertent.

Of course they were, I too don't notice when my bank account has millions of dollars more that it's supposed to have... 3 years in a f*cking row!

If they truly did not know about the overcharges, the CFO and Controller both need to be fired for incompetence.

Corporate scamming and Federal compliance

[Acecoolco]

This is why corporations can get away with crap like this. They just made 80 million, were fined 25 million by the government for their cut of ILL GOTTEN MONEY which ends up to be around 35% the federal tax rate for corporations/companies. The victims, the customers, were not reimbursed any of the money which they were scammed out of..

Re:If it is a glitch why is it always in their fav

[Anonymous Coward]

Believe it or not, fines for undercharging HAVE been levied against telcom providers who provide deaf relay services. Thanks to lobbying by companies that provide relay service, but aren't long-distance companies themselves, deaf relay companies are REQUIRED to bill for long-distance and allow callers to use the long-distance provider of their choice. Importantly, it's NOT an option for relay providers to just eat the cost of the actual long-distance service, even though it actually costs the carrier-owned relay services more money to account for long distance and bill for it than it would cost to just write off the charges entirely.

I worked for one of them. We were fined a shocking amount of money because we had a bug in our billing software that caused us to not bill some users for the associated long distance charges. We didn't notice for months, because (as a telcom), the long distance charges were largely a paper fiction anyway (the service itself was a flat-rate monthly fixed charge that didn't vary by call volume, because we used VoIP for everything internally and it was just a data service). We found out about the bug the same way the competitor who filed a complaint with the FCC did... people posted messages online about how to use us and exploit the bug to avoid the long-distance charges.

The worst part is, not only were we fined, but we were fined even though everyone (including the FCC) knew we fixed the bug within a matter of hours of its discovery. We actually would have been fined LESS for intentionally overcharging users over a period of years than we were fined for failing to bill even a single customer. That's how politically powerful the unnamed non-telcom-that-dominates-deaf-relay-services-in-America happens to be.

Danger Mr Robinson!

[obergfellja]

sounds like either a "programming error" or a numbers error.

Shortfall

[SoundGuyNoise]

Now if Verizon would only get rid of the shortfall charge for not using enough long distance service.

Sounds about right to me...

[DarthVain]

That's about par for the course.

Not sure how much you track these things but it is all pretty much the same. Any government or regulatory body when giving out fines, is not doing so to punish the offender, but is rather doing it so the public thinks they are doing something about anything. Companies know this and take advantage of it. The only downside to them is perhaps maybe some PR if it is a big enough screw up that makes the media. Mostly they just call it "The Cost of Doing Business", and move on.

Most of my examples I can think of relate to fines for environmental or safety breaches, but I have no doubt that this also applies to consumer protection. When a transport ship dumps waste in the ocean, and somehow against all odds gets caught, they might get a fine of 50,000 dollars, but if on the trip they actually made 1.5 million, then what is the point. Compound that by how many times you can do it before getting caught, and offset that with what it costs to properly dispose of the waste in port, and you have to ask your self why even bother. Look at the Tar Sands, a company was just fined 3 million for killing 1500 ducks in a tailing pond, but made billions... Oh and the same thing happened again like last week. Other than the bad PR (to which the other oil patch companies who were not involved must be really happy about) who cares. The same can be said for the mining industry, metallic, coal, etc... Look at the mine disaster in Chile, that company was previously fined many times for not having proper safety, and yet... Look at even the largest in history, the oil spill down in the gulf, all told what does BP have to look forward to? Maybe 1 billion in payouts if they manage to even do that, and you know over the years as scrutiny decreases, they will fight tooth and nail to reduce that number, when in the end they pull in over 3 billion in revenue PER YEAR. Profit.

So colour me not so surprised. In fact if I am surprised at all it is at them getting a fine at all. I know my first reaction was I wish the CRTC up here in Canada would grow some balls like the FCC and actually take some action against the telcos that are slowing raping and pillaging their consumers.

Re:3 Good Reasons Why You Don’t Need A Cell

[MobileTatsu-NJG]

I’m paying $50 a month for a phone I rarely, if ever use... This is why I’m offering up 3 reasons why canceling your cell phone plan might be a good idea.

*smirk*

At least one corporate 'death penalty' imposed

[garyebickford]

Arthur Anderson, the auditor of Enron, was given what amounted to a death penalty. IMHO this was a worthy precedent. It should happen more often. The argument that "It will put innocent people out of work" is specious - those people will be able to get other jobs if the economy isn't trashed.

But it will hit the investors and management hard - especially if the executives who are found guilty of sufficient malfeasance were also banned from taking such high level jobs anywhere else (that would be another good legal standard IMHO.) In fact that should be a part of any plea bargain regarding felonious executive misconduct.

From Wikipedia:

In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an energy corporation based in Texas which later failed.

It has gotten harder to hide the paper trail

[garyebickford]

Over the years it has gotten progressively more difficult to hide or 'lose' the paperwork permanently, because of federal requirements for recordkeeping, which now include all electronic communications such as emails and instant messages IIRC. You'll notice that many recent investigations have involved poring through the companies' emails and IMs to look for clues, which they can then use to follow the threads to the people you mention.

The Sarbanes-Oxley act made the CEO personally liable for 'mistakes' in the accounting. The "I didn't know" defense is no longer available to them.

In every project there comes a time to shoot ...

[garyebickford]

"In every project there comes a time to shoot the engineer and ship the project"

Most of the time, it's not because the people engineering them suck - it's because management, up above them, is driving the engineers too hard.

The hard part is figuring out the right time to shoot. :D

Managing truly is a judgment call, balancing what is known and many unknowns to make a decision. If there were enough information, a computer could do it. Trying to achieve engineering perfection requires an asymptotic effort, and can be taken too far, disregarding the needs of the rest of the system. And of course there are other influences - information that gets passed up the tree often gets whitewashed on the way.

Somebody once said "The important thing is not making the right decision - it's making a decision, and then doing what's necessary to make it the right decision." (This was NOT intended to mean doing what's necessary to get away with something. That's a whole other thing.)

Just like in every other group, 90% or 95% of executives are trying to do the right thing, and just like in every other group some are more competent than others. The ones we hear about are the other ones - the incompetent, the unlucky, and the wrongdoers. But there are over 30,000 publicly held companies in the US, the vast majority of which really are trying to just get along. Of course, those are of no interest to the media.