Verizon customers may soon be eligible for payments of up to $100 each from a $100 million settlement resolving a class-action lawsuit over the carrier’s monthly “Administrative and Telco Recovery Charge.” Despite the settlement, Verizon plans to continue assessing the fee and reserves the right to increase it in the future.
The settlement follows claims that Verizon failed to clearly disclose the nature and basis of the administrative surcharge, which Verizon says helps cover regulatory compliance, taxes, and network operating costs. At present, the charge is $3.30 per line per month.
Notices by email and postcard were sent this past week to Verizon customers who paid the administrative charge between January 2016 and November 2023. Eligible customers have until April 15, 2024 to submit claims against the $100 million fund.
According to the settlement filing, “Verizon has denied and continues to deny that it did anything wrong and that the lawsuit has any merit.” The agreement also notes that Verizon intends to keep charging the Administrative Charge and believes it retains the right to raise it.
Filed in New Jersey Superior Court, the lawsuit alleged Verizon misled customers by not adequately explaining the basis for the fee and that the surcharge effectively increased monthly costs beyond advertised rates.
Although the lawsuit did not seek to eliminate the charge entirely, plaintiffs asked for greater transparency about what the fee covers. As part of the settlement, Verizon is required to provide clearer explanations to customers about the Administrative Charge’s purpose and composition.
Verizon maintains the fee was disclosed appropriately and points out that relatively few customers raised complaints over its nearly 20-year presence. The carrier also contends that plaintiffs waived certain legal rights under their contracts with Verizon.
Individual settlement payments are expected to fall between $15 and $100, depending on how long a claimant paid the administrative charge. Final distributions depend on court approval of the settlement, scheduled for March 22, and could be reduced if an unexpectedly large number of claimants submit requests.
In short, eligible current and former Verizon subscribers may receive some reimbursement, but the Administrative and Telco Recovery Charge will likely remain part of Verizon’s billing structure going forward.
(Photo by Leon Bredella on Unsplash)
See also: SpaceX exchanges first texts using its ‘Direct to Cell’ satellites
Looking to revamp your digital transformation strategy? Learn more about Digital Transformation Week, an event taking place in Amsterdam, California, and London, co-located with Cyber Security & Cloud Expo.
Explore other upcoming enterprise technology events and webinars powered by TechForge.