Verizon agreed to a proposed settlement last week under which it would pay $64.2 million to settle claims that it overcharged customers who signed up for family plans.
Family SharePlan customers were allegedly billed for in-network calls that were supposed to be free, according to a class-action lawsuit filed in 2006 in a New Jersey federal court. Customers with that plan were also allegedly billed more than the advertised rate for additional minutes they used over their monthly allowance.
The alleged overcharges happened between 2002 and 2006, at the height of so-called "family share" plans' popularity with customers.
Under the terms of the settlement, which has yet to be approved by the court, Verizon would pay $36.7 million into a settlement fund, according to court filings obtained by Consumerist. Once lawyer fees and other expenses have been deducted -- $19.26 million alone will be paid to plaintiffs' attorneys, Law360 reports -- Verizon would pay the remaining amount in cash and bill credits to affected customers.
Verizon would then pay out another $27.5 million in the form of credits for free phone calls, the court documents state.
When asked whether Verizon had deliberately overcharged people with Family SharePlans, or whether it was merely a mistake, Peter Bezek, one of the attorneys who filed the class-action suit, said he believed it was “primarily an oversight.”
“I assume they legitimately believed in the billing practices they had,” Bezek told The Huffington Post. “Ultimately, when they were shown there were, in fact, billing problems, they acted responsibly and settled the case.”
Verizon declined to comment for this story.
Of course, we don’t make phone calls today nearly as much as we used to, opting instead to send text messages and emails. As a result, cell phone providers now offer plans with unlimited talk time, meaning this problem is unlikely to happen on a large scale again.
But just because charging for "minutes" isn't as common now doesn't mean that Verizon -- and companies like it -- won't overcharge you in other ways. Verizon and AT&T have both been accused of other types of improper billing, and have had to pay out substantial sums of money in order to make such cases go away.