Verizon ditches $2 fee after customer, FCC criticism

Reuters

Verizon Wireless has reversed its decision to charge a $2 fee for telephone and online bill payments, bowing to a storm of criticism from consumers and the U.S. Federal Communications Commission (FCC). The biggest U.S. wireless operator retracted its decision on Friday, just a day after it announced the fee for one-time payments, which was to have begun January 15.


Verizon said it listened to its customers and made the decision based on customer input after many complained and some threatened to leave the service if the fee was instituted. A spokesman said that the company had just wanted to encourage consumers to pay their bills via different methods such as autopay, where they give Verizon permission to charge their credit card or bank account automatically each month.


Verizon Wireless is a venture of telecom companies Verizon Communications Inc (New York) and Vodafone Group Plc (London).


The quick turn-around came after little more than a day of complaints, but not before the FCC said it was "concerned" about the fee and that it was looking into it.


"On behalf of American consumers, we're concerned about Verizon's actions and are looking into the matter," an official for the FCC said earlier on Friday. U.S. regulators are already investigating Verizon in response to the company’s recent wireless spectrum agreements with multiple cable companies.


The prospect of a $2 fee created a flurry of online activity and one consumer organization, Change.org, said 95,000 people joined a campaign on its website urging Verizon to drop the fee.


The turnaround comes after another high-profile reversal earlier this year by video rental service Netflix Inc in the face of customer disgust. In October it canceled plans to split its DVD rental service from its online streaming service. The move would have forced customers of both streaming and DVD options to visit different websites and maintain different accounts for each subscription.


Bank of America also recently tried to implement a similar fee, but then decided against charging its debit card users $5 a month after customers and lawmakers protested the charge.


The Verizon Wireless incident served to highlight fee practices elsewhere in the communications industry. Rivals AT&T Inc (Dallas, Texas, USA) and Sprint Nextel (Overland Park, Kan., USA) said on Friday that they charge some customers $5 for bill payments, revising their comments from the day before.


AT&T and Comcast Corp say that they charge some customers who look for personal assistance in paying their bills but that they do not charge for online payments. Sprint said it charges customers with bad credit if they refuse to enroll for auto pay.


The Sprint and AT&T fees are even higher than Verizon's proposed levy at $5 per transaction. Comcast's payment fee, which is only levied in some states, is $5.99. The FCC did not comment on whether it would look into other companies' fee policies for bill payment.


(Reporting By Sinead Carew; Additional reporting by Lisa Richwine in Los Angeles; Editing by Tim Dobbyn)

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