Verizon's Admin Charge 'Fictitious,' 'Unlawful,' Say 50 Plaintiffs in Class Action

After consumers sign up, Verizon charges them higher monthly rates than it advertised and pads their bills with an “administrative charge” that’s currently $3.30 per line on top of the advertised price, said the complaint. The ‘fictitious’ administrative charge allows Verizon to “unlawfully charge its customers more per month for Verizon wireless services without having to advertise the higher monthly rates,” it said. The carrier first began “sneaking” the charge into postpaid customers’ bills in 2005, initially at 40 cents per month for each line and has repeatedly bumped the amount on a regular basis, said the complaint. The most recent increase was on June 23, 2022, when Verizon raised the administrative charge 70% from $1.95, it said. Verizon has used the charge as a “revenue lever to covertly jack up its monthly service prices and to squeeze its existing subscribers for more cash" whenever it desires, it said. To date, the carrier has “improperly collected billions of dollars in additional, unlawful charges” from the proposed class members through the scheme, it said. Only after customers sign up for wireless service -- and are “financially committed to their purchase and cannot cancel without penalty" -- do customers learn of the charge, the complaint said. Verizon then “deliberately and affirmatively omits or misrepresents” the charge on billing statements. Its paper bills fail to mention the charge at all, telling customers to “check your online bill for all surcharges, taxes and gov fees,” it said. On online bills, Verizon omits the charge from the monthly charge section, “where it actually belongs,” and puts it under surcharges, “where it is lumped together with various government charges, taxes, and fees,” the complaint said. For years, the company “explicitly and falsely stated” on the bill that the charge is imposed on subscribers to “cover the costs that are billed to us by federal, state or local governments.” By its own design, Verizon’s monthly billing statements served to further its “deceptive scheme and keep customers from realizing they are being overcharged,” it said. On a support page, Verizon gives a different definition of the charge, claiming it’s tied to operating costs, including telephone company interconnect charges and network facility and service fees -- "all of which are basic costs of providing wireless service, and which a reasonable consumer would expect to be included in the advertised price for any wireless service plan,” the complaint said. Verizon doesn’t adjust the amount of the charge based on changes to its costs, but it “unilaterally sets and increases” the amount of the charge “based on its internal revenue targets,” it said. Verizon’s “misrepresentations on bills that the charge is imposed on subscribers to recover the costs" billed to Verizon by the government "were false statements of material fact intended to discourage customers who discovered the Administrative Charge from questioning or objecting to the Charge,” it said.