Verizon settles up over admin fees

Verizon is admitting no wrongdoing in the way it collects administrative fees on customers’ bills, but has agreed to pay $100 million to settle a class-action suit. The settlement was reached in November 2023, and affected customers are now being notified by email and letters.

According to the settlement website, Verizon customers claimed in a class action lawsuit that Verizon routinely charged its individual postpaid wireless account holders a monthly Administrative Charge and/or Administration and Telco Recovery Charge that was unfair and not adequately disclosed.

The complaint alleged that contrary to Verizon’s claims, it’s using the administration charge as a lever to increase its revenues and profits, something other carriers have been accused of doing to avoid calling them out as straight-up price hikes.

The suit states that Verizon first began adding the Administrative Charge to its postpaid wireless customers’ bills in 2005, initially at a rate of 40 cents/month for each phone line on its customers’ service plans. The rate increased on a regular basis, with the most recent increase occurring in June 2022, when it increased from $1.95 to $3.30 per line – a 70% jump.

Indeed, Verizon acknowledged an administration fee increase in 2022, explaining in a statement to Fierce at the time that “from time to time,” Verizon reviews and makes adjustments to the fees to defray some of its administrative and telco expenses and costs of complying with regulatory requirements.

As part of this settlement, Verizon will amend its customer agreement to include revised Administrative Charge disclosures.

This week, the company provided the following statement in response to questions from Fierce.

"Verizon clearly identifies and describes its wireless consumer Admin Charge multiple times during the sales transaction, as well as in its marketing, contracts and billing. This charge helps our company recover certain regulatory compliance, and network related costs. As always, our Company stands committed to transparency and the clear disclosure of all consumer charges and fees."

Those eligible in Verizon’s latest settlement are customers who received postpaid wireless or data services from the company from January 1, 2016, to November 8, 2023. Claims must be filed by April 15, 2024.