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Verizon Wireless customers may get up to $100 each as part of a $100 million settlement in a class-action lawsuit over Verizon’s monthly “Administrative and Telco Recovery Charge.”
But as is typical in class-action settlements, Verizon isn’t admitting any wrongdoing. It also plans to keep charging the monthly fee and says it may raise it in the future.
Settlement notification emails with unique codes for submitting claims have been going out to eligible Verizon customers over the past week. The emails were still being distributed as of last night, so you might still be in line for a payout even if you haven’t received one yet. Postcard notices are also being sent.
Verizon’s Administrative and Telco Recovery Charge for wireless phones and other devices is $3.30 per line after being raised from $1.95 in mid-2022. It was originally called the “Administrative Charge” but was renamed to include “telco recovery” at around the same time as the price increase.
“Verizon has denied and continues to deny that it did anything wrong and that the lawsuit has any merit,” the settlement notification emails say. “Verizon states that it will continue to charge the Administrative Charge and that it has the right to increase the Administrative Charge.”
The emails direct customers to the settlement website. US-based customers “who received postpaid wireless or data services from Verizon and who were charged and paid an Administrative Charge between January 1, 2016 and November 8, 2023” are eligible and must file a claim by April 15, 2024, to receive a payment.
Verizon fee covers taxes, normal business costs
Like other vaguely explained telco fees, the Verizon charge makes the real price paid by consumers higher than the rates Verizon advertises. The fee is not mandated by the government, but Verizon tells customers that it covers regulatory obligations, taxes, and various expenses that are just part of the cost of doing business for an operator of a nationwide cellular network.
As Verizon’s website states, the charge helps cover a wide range of expenses, such as the “costs of complying with regulatory and industry obligations and programs, such as E911, wireless local number portability and wireless tower mandate costs; property taxes; and costs associated with our network, including facilities (e.g., leases), operations, maintenance and protection, and costs paid to other companies for network services.”
The class-action complaint filed in a New Jersey Superior Court alleged that “the Administrative Charge is never adequately or honestly disclosed to customers… Verizon utilizes the Administrative Charge to unlawfully charge its customers more per month for Verizon wireless services without having to advertise the higher monthly rates.”
The charge was introduced in 2005 at a rate of $0.40 per month, the lawsuit said. The lawsuit did not try to force Verizon to stop charging the fee but said Verizon should “honestly and adequately disclose the Administrative Charge and its true nature and basis in Verizon’s customer bills and in communications with Class members at or before the time the wireless services contract is created,” and reimburse users “for any and all undisclosed (or inadequately disclosed) extra-contractual fees they were forced to pay.”
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