Verizon Communications Inc. (NYSE:VZ) thought it had a class-action settlement finalized with subscribers who claimed that Verizon “crammed” its phone bills with added charges. The leader in mobile telecommunications was about to put this chapter behind it, when … the federal government stepped in and nixed the deal, claiming it was not fair, reasonable and adequate.
The Federal Trade Commission filed a friend-of-the-court brief on behalf of the class in the lawsuit, claiming that the settlement does not do enough to protect consumers – for example, the settlement document doesn’t contain languages informing the class members that those who don’t opt out of the settlement would be prohibited from making any claims against Verizon Communications Inc. (NYSE:BZ) or any third-party merchants involved in the “cramming” scheme.
The class action suit was brought forth by Verizon Communications Inc. (NYSE:VZ) subscribers, who claimed that Verizon deceived its customers by adding charges to phone bills without the consent of the customers – charges that came from third-party merchants, aggregators and Verizon’s own third-party billing and collections systems. In addition, Verizon was alleged to have not verified consent for the charges with customers and instead went on the word of its third-party partners to allow the charges, then stretched out the deception by not specifically labeling the charges properly.
Also, according to the brief filed against Verizon Communications Inc. (NYSE:VZ) on behalf of the class of subscribers, the concept of “cramming” – or placing unauthorized charges on a phone bill – in inherently deceptive and not meant to grab consumers’ attention, the re may be many more subscribers who don’t realize they’ve been charged wrongfully and may not know they have a right to make a claim despite not being part of the class action.