Verizon gets the message, drops new fee to pay bill




Verizon Wireless bowed to a torrent of criticism Friday and reversed a day-old plan to impose a $2 bill-paying fee that would have applied to some customers.

The consumer vitriol, which cascaded across Twitter and onto blogs and petitions all around the Web, struck a chord with a company that was clearly not expecting it.

“The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions,” Verizon Wireless said in a statement referring to the reversal.

That a company with revenue of $15 billion in the most recent quarter would have to quickly change course over such a small fee suggests something particular about its business and others like it.

Similar to fee-bedeviled airline passengers with little choice on nonstop flights, or bank customers who do not want to spend hours untangling automated payments so they can switch institutions, Verizon Wireless customers have limited options because they are locked into multiyear contracts. And they apparently did not like being told it would cost money to pay money to the company.

The consumer outcry may also reflect the national mood – and some companies’ misreading of it, according to some analysts.

“I just think people are sick of being nickeled and dimed by big companies,” said Edgar Dworsky, founder of ConsumerWorld.org. “And it’s just baffling to me why a company like Verizon Wireless or Bank of America doesn’t do market testing on something like this first. It doesn’t take a genius to figure out that there is going to be a backlash.”

What was surprising about the Verizon Wireless rollback was how quickly it occurred. It took consumers about a month to persuade Bank of America to rescind its plan to charge a $5 monthly fee to people who used their debit card for purchases.

With Verizon Wireless, the change of heart took only a day, even though it is the week after Christmas when companies often drop bad news in the hope that fewer people are paying attention.

“The multiplication effect with things like Twitter is incredible,” said Ron Shevlin, senior analyst at the Aite Group in Boston. “And because of the national mood, it hits the boiling point really quickly.”

Verizon Wireless also may been have moved to change its mind when the Federal Communications Commission put out word Friday that it thought the company’s actions merited closer scrutiny.

If the company had taken a different tack, it might have convinced consumers that some kind of fee increase was necessary, Shevlin said. “The easy thing would have been to be more explicit about what the costs were that were causing it to add this fee,” he said.

The company, for instance, might have explained how few people were going to pay the fee, which was supposed to be for one-time credit or debit card payments by phone or on the company’s website. It also could have explained how much higher the costs were, on a percentage basis, to accept payments in that way, vs. regular monthly credit card billing, which would have remained free.

Verizon Wireless declined a request for much of this information Thursday and did not respond to follow-up requests Friday.

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Article source: http://www.sacbee.com/2011/12/31/4153999/verizon-gets-the-message-drops.html

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