Verizon Customers Could Receive Up to $100 Each in Settlement Over Monthly Charge

NEW YORK (AP) — Verizon customers in the United States could soon receive compensation of up to $100 each as part of a $100 million settlement in a class-action lawsuit over the telecommunications company’s monthly “Administrative and Telco Recovery Charge.” Despite the settlement, Verizon plans to continue imposing the fee and may even raise it further.

The settlement follows a lawsuit that accused Verizon of failing to adequately disclose the purpose and basis of the administrative charge, which goes toward funding regulatory compliance, taxes, and network operations. Currently, the fee stands at $3.30 per line per month.

Verizon has been reaching out to its customers through emails and postcard notices to inform them about the settlement. These notifications have been sent to customers who paid the administrative charge between January 2016 and November 2023. Customers have until April 15, 2024, to file a claim for a share of the $100 million settlement fund.

In the settlement agreement, Verizon asserts that it denies any wrongdoing and claims that the lawsuit lacks merit. The company also states that it will continue to charge the Administrative Charge and that it retains the right to increase it.

The lawsuit, which was filed in a New Jersey Superior Court, argued that Verizon had deceived customers by inadequately explaining the basis for the fee. The suit claimed that the charge was used to increase the effective monthly rates beyond the advertised prices. While the lawsuit did not aim to eliminate the charge completely, it did seek greater transparency from Verizon regarding its purpose and nature. As part of the settlement agreement, Verizon is required to provide customers with a more detailed explanation of the fee.

Verizon maintains that it had adequately disclosed the existence of the charge and argues that very few customers have complained about it over the nearly two decades that it has been in place. The company also argues that the plaintiffs had waived their right to legal action against the carrier through their contracts.

The settlement amounts are expected to range from $15 to $100 per claimant, depending on the length of their subscription with Verizon. However, these payments are subject to final court approval on March 22, and they may be reduced if an unexpectedly large number of customers file claims.

Despite the impending settlement, Verizon intends to retain its right to apply and adjust the administrative charge as it deems appropriate in the future. This means that while current and former Verizon subscribers may receive some reimbursement, the controversial surcharge is likely to remain in effect.