Verizon will maintain controversial surcharge despite lawsuit

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Verizon customers may soon receive payments up to $100 each as part of a $100 million settlement in a class-action lawsuit over its monthly “Administrative and Telco Recovery Charge.” However, Verizon plans to continue charging the fee and may raise it further.

The settlement comes after a lawsuit alleged Verizon failed to properly disclose the nature and basis of the administrative surcharge, which helps fund regulatory compliance, taxes, and network operation costs. The fee currently sits at $3.30 per line monthly. 

Emails and postcard notices regarding the settlement have been distributed over the past week to Verizon customers who paid the administrative charge between January 2016 and November 2023. Customers have until April 15, 2024 to file a claim for a slice of the $100 million settlement fund.  

“Verizon has denied and continues to deny that it did anything wrong and that the lawsuit has any merit,” the settlement agreement states. “Verizon states that it will continue to charge the Administrative Charge and that it has the right to increase the Administrative Charge.”

The lawsuit, filed in a New Jersey Superior Court, argued Verizon misled customers by inadequately explaining the basis for the fee. It alleged the charge was utilised to increase effective monthly rates above advertised prices. 

While the suit did not attempt to eliminate the charge altogether, it sought additional transparency from Verizon surrounding its nature and purpose. The settlement agreement requires that a more detailed explanation of the fee be provided to customers.

Verizon contends the charge was always adequately disclosed and that few customers complained over its near 20-year existence. It also argues plaintiffs contractually waived their right to legal action with the carrier.

Settlement amounts are expected to range from $15 to $100 per claimant, depending on the length of their Verizon subscription. Payments require final approval of the agreement by the court on 22 March and could be reduced if an unexpectedly high number of customers file claims.

Despite the pending settlement, Verizon maintains its right to apply and adjust the administrative charge as it sees fit going forward. So, while current and past Verizon subscribers may see some cash back, the controversial surcharge will likely remain in place.

(Photo by Leon Bredella on Unsplash)

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