Verizon Class Action Nets Piddly Payouts Over Company’s Completely Bogus Fees
Last year U.S. broadband giant Verizon faced yet another class action lawsuit for sleazy, misleading fees. This latest $100 million class action alleged that Verizon for years ripped off its customers via a $3 (and up) “Administrative and Telco Recovery Charge” that it tacked at the bottom of user bills to help the company falsely advertise a lower price at the point of sale.
Verizon ultimately settled the lawsuit last October. But whereas class action participants were promised payouts between $15 and $100, many Reddit posters say they were lucky to see $6 or $7:
“I got 5.77! We should put our money together and buy a billboard outside Verizon with a picture of a middle finger on it.”
Countless cable and broadband companies tack on a myriad of completely bogus fees below the line, letting them advertise one rate — then sock you with a higher rate once your bill actually arrives. These companies will then brag repeatedly about how they haven’t raised rates yet this year, when that’s almost never actually the case.
One 2019 Consumer Reports study found that about 24% of consumer bills are comprised of bullshit fees, generating cable giants $28 billion in additional revenue annually. Some of the fees, like Centurylink’s “Internet Cost Recovery Fee” are comical gibberish. Others, such as “regulatory recovery fees,” pretend to be taxes to try and redirect the consumer’s ire toward government.
While class action lawsuits can modestly shift company behavior, it doesn’t really drive lasting change. Neither do state or federal fines, which often wind up being a small fraction of the money made off the practice, assuming they aren’t litigated down to nothing.
Class actions were flimsy enough. But starting in 2011 with a landmark AT&T Supreme Court case, America proudly decided it was legal to let companies use contract find print to force customers into binding arbitration, a lopsided pseudo-legal venture in which corporations win disputes the majority of the time. So the problem persisted.
The Biden administration made some promising noise about cracking down on such fees, but in telecom most of those efforts wound up being somewhat hollow. Like the Biden FCC creation of a new “nutrition label” rule that requires ISPs be more transparent about fees, but fall short of actually stopping your ISP or wireless carrier from ripping you off. Under Trump 2.0 I suspect those rules will never be enforced.
So the predatory corporate behavior, and the performative legal and regulatory solutions for it, will continue.