Keller Grover LLP : Verizon Third Party Charge Cramming Case Settled

Verizon Third Party Charge Cramming Case Settled

Keller Grover LLP filed this nationwide class action lawsuit on April 27, 2009 in the United States District Court, Northern District of California, against Verizon Communications Inc., Verizon California, Inc., Verizon Corporate Services Group Inc., Verizon Services Corp., Telesector Resources Group, Inc. d/b/a Verizon Services Group, Verizon Services Operations Inc., Verizon Services Organization, Inc., Verizon Corporate Services Corp., and Verizon Data Services, Inc. ("Verizon").  The Complaint alleges a practice of charging Verizon’s landline customers for products and services that they did not knowingly authorize and the alleged illegal billing and collection of such charges. Plaintiff alleges violation of the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968; violation of the Telecommunications Act of 1934, 47 U.S.C. §§ 201, et seq. (the “TCA”); and breach of trust.  Plaintiff also alleges tortious interference with contract; violation of California Public Utilities Code § 2890 (the “CPUC”), violation of California Business and Professions Code sections 17200, et seq., and breach of contract.  The placing of unauthorized charges on customers’ monthly phone bills is commonly known as “cramming.”

Keller Grover LLP working with lead counsel Jacobs Kolton, Chtd. and David Schachman & Associates, P.C., and co-counsel Lieff Cabraser Heimann & Bernstein, LLP, negotiated and entered into a Settlement Agreement setting forth the terms of a proposed class action settlement.  As part of the settlement process, the parties engaged in several mediation sessions under the supervision of retired Judge the Honorable Daniel H. Weinstein.  While Verizon denies any wrongdoing, both sides have agreed to settle the lawsuit to avoid the cost, delay, and uncertainty of litigation.

The Federal District Court Judge to whom the case is assigned, the Honorable Saundra B. Armstrong, preliminarily approved the settlement on February 28, 2012.  The hearing for Final Approval of the Settlement is scheduled for February 19, 2013 at 1:00 p.m.

Settlement Refund Procedure

Under the terms of the settlement, Verizon landline customers will receive 100% refunds for unauthorized third-party charges.

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 the settlement website and must be submitted by November 15, 2012. There is no dollar cap on the monetary recovery to be paid under the Settlement.

Settlement requires Verizon to make extensive changes to its billing practices

Under the settlement, Verizon has also agreed to change its billing practices to help protect its customers from being crammed in the future.  Here are some of the most important changes:

•    Bill blocking:  When new customers sign up, they will have the chance to prevent third parties from adding charges to their Verizon bills (“bill blocking”), for free.  Verizon will also notify current customers that they can select bill blocking for free.
•    Notice of new charges:  Customers will get a letter confirming any new third-party charges that are being added to their Verizon bills.  If those charges are improper, the customer will have the chance to dispute them and get a refund.  
•    Penalties for cramming:  Verizon will penalize third parties for adding unauthorized charges to customers' bills, by charging the third parties a penalty fee for billing for charges that turn out to be unauthorized.
•    Training:  Verizon will train its customer service representatives to spot and correct cramming when customers call the customer service hotline.
•    Notice of bad actors:  If third parties engage in high levels of cramming, customers who have been billed by those third parties will get special notice inviting them to check their bills for unauthorized charges and have them removed.
•    Audits of third parties:  Verizon will regularly audit its third party billing to ensure that these steps prevent cramming in the future.

After April 19, 2012, you may request a summary of third party charges or a Claim Form.  If you need additional information please review the settlement website, or contact the Settlement Administrator at 1-877-772-6219, or  at questions@verizonthirdpartybillingsetlement.com.

Remember, to receive a payment, class members must submit a valid claim form by November 15, 2012.

Click here to read the Congressional press release announcing the settlement.