Verizon Wireless to refund $50 million over software glitch

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.

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TOPICS: Software, Verizon
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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

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18 comments
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  • RE: Verizon Wireless to refund $50 million over software glitch

    The argument over the date and time of the data exchange is ridiculous.....the date and time listed in the data details is not the time the data exchange occurred, it is the time the transfer was recorded in the billing system, the actual transfer may have been days earlier.
    Doctor Demento
  • Did you ever notice...

    ...That the "software glitches" never seem to benefit the customer? I find it a little hard to believe that the team of developers just "missed" this calculation error.

    What bullsh*t.
    trickytom3
    • Yep, another rip-off.

      Just like the fractional-minute fiasco of several years ago. Did they fix it? Nope. They paid out the required pittance and kept right on dicking the customers over. But now they felt justified because the cat was out of the bag.

      That's our "government" at work, protecting the consumer.
      dgurney
      • Say It!

        @dgurney Is there anyone who hasn't been dicked over by Verizon in one way or another?
        Gandalf The Grey
    • That Should Have Been The Title Of This Article!

      @trickytom3 Now that the phone companies are gobbling each other up we are getting close to 'Ma Bell" again before Jimmy Carter broke it up! Who can we take our business to? AT&T? I think I'll take my chances with Metro PCS.
      Gandalf The Grey
  • RE: Verizon Wireless to refund $50 million over software glitch

    @trickytom3

    Actually, they do help the customers sometimes....in 2008 there was a glitch in the AT&T billing system which gave many customers in the New Jersey market a $50 credit on the bill for December....and customers who dutifully reported the error were allowed to keep the credit. I know this because I worked for AT&T at the time....
    Doctor Demento
  • RE: Verizon Wireless to refund $50 million over software glitch

    When you understand how the billing system works, you come to realize that an error is an error of some kind is actually more likely than not, and it is actually something of a minor miracle every time a bill is generated which does not contain an error.
    Doctor Demento
    • RE: Verizon Wireless to refund $50 million over software glitch

      @Doctor Demento

      In English please?
      ShortyStuff
      • RE: Verizon Wireless to refund $50 million over software glitch

        @ShortyStuff

        It is called `added dealer profit`.

        Commonly known as `nickling and diming` someone.

        A practice Verizon is notorious for.

        Not that much different from a local convenience store with some off label bagged candy, 59 cents each, or 2 for a buck. The fair price for one OUGHT to be 50 cents, but, since the store gets 59 cents for one, guess what ,`added dealer profit`. On the separate sale of two bags, the store makes an additional 18 cents. Clued in now??
        fatman65535
    • Don't bother.

      This guy apparently thinks that basic math is difficult for a computer system.
      dgurney
      • LOL

        @dgurney Don't you love it when you read posts by people who defend big business for screwing the people.
        Gandalf The Grey
  • RE: Verizon Wireless to refund $50 million over software glitch

    Any word on AT&T? FCC on them too? I have been charged by AT&T for the same thing in the past few years.
    SacDude
  • RE: Verizon Wireless to refund $50 million over software glitch

    Software glitch my arse. This was not a software glitch. They knew they were overcharging and that people were accessing by accident since at least 2007. They lied so they could try and keep the money.

    John Winske
    jwinske
  • RE: Verizon Wireless to refund $50 million over software glitch

    FCC sees the tree but not the forest. Verizon is charging $10 mandatory data if you purchase certain phones, which are not smart phones. This is the most ridiculous steal I have ever seen. What if I don't want to send text messages or pictures? They want to force me to do this just because they want my $10? What a shame...
    i-Pete
  • Alternatives

    The telecom industry has asked us to accept an exceptionally high rate of "smoke and mirrors" in their approach to billing for as long as I can remember. This industry now promotes two year contracts that require subscribers to agree in advance to pay for two years worth of service when none of us are offered any kind of guarantees on the permanence our income. Unexpected, unclear and unrequested services have been a part of how this industry has approached billing for a long time.

    But don't tell yourself you have no choice. Don't tell yourself that this is just the way it has to be. That's simply not true.

    After getting trapped in contracts that did not benefit me, hit with hidden or unclear charges and generally disappointed across the board for many years as a telecom consumer, I finally implemented some personal rules that I simply won't break:

    1) I won't sign a contract for any kind of telecom or internet service. Period. If they want me to sign a contract, I'm looking elsewhere.
    2) I won't agree to any billing arrangement where it is even possible for me to be billed for anything I don't explicitly approve BEFORE consuming it and being billed for it.

    Simple ...

    There are telecom providers out there that do business on this very simple, no tricks basis. Such providers don't offer all the bells and whistles. They don't offer the latest, fanciest gear. So if these things are important to you, I suspect you're out of luck. But such providers DO offer no contracts, no surprises telecom service that works. I don't have dropped calls. I don't have outages. The service is reliable, and plenty fast enough for all my needs. I've been using this approach for a couple of years now and I will never go back. I sign no contracts and I never get charged for something I didn't want, know about or understand.

    It is possible.

    A huge number of people allow themselves to be tricked into signing contracts and accepting unclear and unauthorized charges. They tolerate this experience as "the price to be paid for having the coolest, latest, hottest gear" ... gear most buyers don't really need.

    If people who don't need all these frills refused to pay for them, the industry would have no choice but to get its act together. But when millions agree to sign contracts for stuff they don't need, why should the industry change?
    Trep Ford
  • $50Million loan for years with no interest... Sure it was a mistake ;-)

    and I've got a couple of bridges to sell you if you buy that whopper!
    Reality Bites
  • RE: Verizon Wireless to refund $50 million over software glitch

    And this has NOT stopped!

    I just looked at my current bill, and my daughter's phone is showing a 7 killobyte data exchange (0.07mb) and I'm to be billed $1.99 for this. My daughter says she did not use any data, and I believe her because this isn't the first time I've seen this happen on our phones. So, once again, I have to call up VZW and bitch about this to get it removed from the bill. I can understand the need for a "pay as you go plan", but come on, don't start charging until some threshold is reached. 7 killobytes is a joke.
    WindowWasher
    • RE: Verizon Wireless to refund $50 million over software glitch

      @WindowWasher
      This is not just happening with Verizon. I have AT&T and my daughter usually gets billed for between 1-10 KB. The problem is the placement and use of buttons on her phone makes it easy to accidentally hit the mobile web. Even if she cancels it as soon as it occurs, the web has been accessed and billed accordingly (usually a few cents), though not a flat $1.99 plus usage (just the data usage charge).

      I have called AT&T about the problem and suggested disabling web access. They can do this but that will also disable sending and receiving multimedia text messages that my daughter sometimes uses. I would crazy glue the button on the phone except that it is also used as the "select" button for many functions.
      mystic100