The settlement, preliminarily approved by United States District Court Judge Saundra Brown Armstrong, comes in a suit alleging that Verizon billed its landline phone customers for charges from third-party companies that were not authorized by the customer (a practice known as “cramming”), in violation of federal and state law. Verizon denies any wrongdoing. Both sides have agreed to settle the lawsuit to avoid the cost, delay, and uncertainty of litigation. The settlement was negotiated under the supervision of retired judge Daniel H. Weinstein.
An attorney representing the Class added: “Some settlement class members may have a claim for hundreds or thousands of dollars in refunds under the settlement.” He added that one of the significant benefits available to the class is Verizon’s agreement “to provide summaries of all third party charges, for free, and in customer-friendly fashion, to any Class Member that requests the summary.” This will help customers find out if they paid these charges and, if so, will make it easy to obtain a refund of 100% of any unauthorized charges.
As part of the proposed Settlement, Verizon has also agreed to require various specific changes to billing practices that are designed to prevent cramming in the future. One of the lead counsel for the class added, “It is difficult to overstate the credit that is due Verizon for its commitment to fixing the third-party billing system as it relates to Verizon customers. By this settlement, Verizon has committed to extensive and unprecedented changes that we believe will go a long way toward eliminating cramming and will change the industry.” For example, under the settlement, “for all new landline customers, most third-party charges can be included in the customer’s phone bill only if the customer first explicitly agrees to permit third-party charges on their bills.”
Verizon landline phone customers nationwide (including individuals, businesses and local governmental entities) who were billed for third-party charges from April 27, 2005 through February 28, 2012 will be able to recover 100% of all money they paid in unauthorized third-party charges during that period by submitting a “Full Payment Claim” or recover a refund of $40 by submitting a “Flat Payment Claim.” Both forms will be available at verizonthirdpartybillingsettlement.com and must be submitted by November 15, 2012. There is no dollar cap on the monetary recovery to be paid under the Settlement.