Another Class Action Says Verizon Dupes Customers With Hidden Fees

The carrier pads customers’ bills each month with an “Administrative Charge” -- $3.30 per month for each line at the time of the complaint -- on top of the advertised and promised price, it said. The administrative charge isn't disclosed to customers before or when they agree to buy wireless service from Verizon and is “never adequately or honestly disclosed to customers,” it said. Customers don’t have the opportunity to accept or reject the charge, which is “unilaterally imposed by Verizon without its customers’ consent.”

Verizon began “sneaking” the administrative charge into wireless customers’ bills in 2005, initially at 40 cents per line on their service plans, the complaint said. The company repeatedly bumped the amount, with the latest occurring in June, when it increased the charge by 70% to $3.30 per line, it said. The charge is a “revenue lever to covertly jack up its monthly service prices and to squeeze its existing subscribers for more cash whenever Verizon desires,” said the plaintiff, saying the additional fees produced “billions” of dollars for Verizon from “unlawful charges.”

Customers learn about the administrative charge for the first time on their monthly billing statement, which they receive after signing up for service “and are financially committed to their purchase and cannot cancel without penalty,” the complaint said. The company then “deliberately and affirmatively omits or misrepresents” the charge on billing statements “to further its scheme.”

Verizon’s paper bills don’t mention the charge at all, saying instead customers should check their online bill for all surcharges, taxes and government fees. It omits the administrative charge from the “monthly charges” section and puts it in the “Surcharges” section, “where it is lumped together with various government charges, taxes and fees,” the complaint said. “For years, Verizon explicitly and falsely stated on its monthly bills” that the charge is a surcharge imposed on subscribers to “cover the costs that are billed to us by federal, state or local governments.” Monthly billing statements “have served to further Verizon’s deceptive scheme and keep customers from realizing they are being overcharged.”

On a website support page, Verizon gives a different definition of the administrative charge, claiming it’s tied to various operating costs, including telephone company interconnect charges and network facility and service fees, “all of which are basic costs of providing wireless service” that consumers expect to be included in the advertised cost of a wireless service plan, the complaint said. That, too, is a misrepresentation, said the complaint, since Verizon sets the amount of the administrative charge based on its internal revenue targets. The carrier more than tripled the amount of its monthly, per-line administrative charge since 2015, but “its costs have actually decreased significantly,” said the complaint, referencing interconnection costs.

The 28 plaintiffs in the class action are from North Carolina, Indiana, Texas, Michigan, Arizona, Ohio, Illinois, Georgia, Wisconsin, Colorado, Massachusetts, Minnesota, Pennsylvania, Virginia, Maryland and New Jersey. Plaintiffs seek certification of nationwide and subclasses excluding consumers who are part of the American Arbitration Association Verizon Multiple Case Filings Case No. 01-22-0003-9225.

Plaintiffs claim unjust enrichment, breach of implied covenant of good faith and fair dealing, consumer fraud and violation of various state consumer protection laws. They seek an injunction enjoining Verizon Wireless from the alleged misconduct, disgorgement and/or restitution for all revenue, profit and unjust enrichment it obtained from class members due to the administrative charge, plus an accounting of all administrative charge payments. They also seek an order requiring Verizon to pay punitive, exemplary, treble and/or statutory damages, attorneys’ fees and costs, and pre- and post-judgment interest.