Verizon Wireless to refund $50 million over software glitch

Summary:Following an investigation with the FCC, Verizon Wireless agreed to credit customers who were erroneously charged for accessing data services on their cell phone.

The business impact of technology failures is often substantial, as Verizon Wireless just discovered. Following an investigation with the FCC, the company agreed to credit customers who were erroneously charged for accessing data services on their cell phone.

According to the Washington Post:

The Federal Communications Commission had been investigating the alleged practice and said Sunday it would continue its formal probe, which could lead to additional penalties on the nation's largest wireless firm.

Verizon said that over several years, 15 million customers were charged between $2 and $6 for data services they didn't initiate. A source close to the company said Verizon Wireless will pay more than $50 million in refunds to current and past customers for the error.

Verizon Wireless issued a press release to explain the situation:

As we reviewed customer accounts, we discovered that over the past several years approximately 15 million customers who did not have data plans were billed for data sessions on their phones that they did not initiate. These customers would normally have been billed at the standard rate of $1.99 per megabyte for any data they chose to access from their phones. The majority of the data sessions involved minor data exchanges caused by software built into their phones; others included accessing certain web links, which should not have incurred charges. We have addressed these issues to avoid unintended data charges in the future.

DSL Reports offers additional insight:

For some time we've been tracking how Verizon has been socking customers with a $1.99 data access fee on many phones -- which was incurred by users even if the phone was off or the battery was dead. Even users who had data access on their phones blocked were socked by the fee -- given that the message sent to users to tell them they couldn't get data consumed 0.06 kilobytes of data -- resulting in a $1.99 data fee.

The Verizon press release suggests the company also incorrectly charged some users for visiting Verizon Wireless websites.

More interestingly, it appears the browser built into certain Verizon cell phones would periodically contact the Verizion mother ship to exchange data, even if the user did not initiate those sessions. I would like to know precisely why those browsers phoned home and what kind of data exchange occurred.

Topics: Software, Verizon

About

Michael Krigsman is recognized internationally as an analyst, strategy advisor, enterprise advocate, and blogger. For CIOs and IT leadership, he addresses issues such as innovation, business transformation, project-related business objectives and strategy, and vendor planning. For enterprise software vendors and venture-funded star... Full Bio

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