Verizon Wireless Cancels $2 ‘Convenience Fee’ After Backlash
Verizon
Jin Lee/Bloomberg
Customers enter a Verizon Wireless store in New York.
Customers enter a Verizon Wireless store in New York. Photographer: Jin Lee/Bloomberg
Verizon
Andrew Harrer/Bloomberg
Adam Martinez fixes balloons to a sign outside a Verizon Wireless store in New York.
Adam Martinez fixes balloons to a sign outside a Verizon Wireless store in New York. Photographer: Andrew Harrer/Bloomberg
Verizon Wireless (VZ), the largest U.S.
mobile carrier, canceled a planned $2 “convenience fee” for
online and phone bill payments after a backlash from consumers
and scrutiny from the Federal Communications Commission.
The company reversed its decision after just one day in
response to customer feedback, according to a statement on its
website today. Basking Ridge, New Jersey-based Verizon Wireless
had announced the fee yesterday for users who make single bill
payments on a month-to-month basis online or by phone.
Customers began criticizing Verizon Wireless on Twitter and
Web forums after the company disclosed the fee, with some
setting up online petitions and calling for consumers to boycott
the carrier. The FCC today said it was “concerned” about the
plan and that it would investigate.
“Companies used to think they could get away with putting
out unpopular policies,” said Brianna Cayo Cotter, a
spokeswoman for Change.org, a website that lets people start
online campaigns. “Today, hundreds of thousands of people can
mobilize and change policies in a matter of hours. That’s what
we’re seeing with Verizon.”
Verizon Wireless customers started more than 35 petitions
on Change.org against the fee, including one that was joined by
more than 95,000 people within hours.
Last month, a consumer backlash led to Bank of America
Corp. canceling a $5-per-month fee for debit card users. In that
case, too, consumers used online campaigns to pressure the
company.
‘Predatory Practices’
“When consumers speak against what they see as predatory
practices, quite often they can help change them,” said Joe
Ridout, consumer services manager at Consumer Action, a
consumer-rights group. “Verizon responding as soon as they did
is a point in their favor. It prevented people from actually
being charged and it showed they were listening.”
Verizon Wireless said yesterday it planned to add the fee
to address costs it incurs for processing the single payments.
The charge wouldn’t have applied to customers who enroll in
automatic payment plans, use electronic checks, pay at a Verizon
Wireless store, send in checks or pay through online banking
websites.
“The best path forward is to encourage customers to take
advantage of the best and most efficient options, eliminating
the need to institute the fee at this time,” Dan Mead, Verizon
Wireless chief executive officer, said in today’s statement.
Verizon Communications Inc., which co-owns the wireless
business with Vodafone Group Plc, rose (VZ) 0.2 percent to $40.12 at
the close in New York. The stock advanced 12 percent this year.
Verizon Wireless is driving up profit at parent Verizon
Communications as it gains users for Apple Inc.’s iPhone and
Google Inc. Android devices, which let users browse the Web,
watch video and stream music. Third-quarter net income at New
York-based Verizon Communications doubled to $1.38 billion from
$659 million a year earlier.
To contact the reporter on this story:
Alex Sherman in New York at
asherman6@bloomberg.net
To contact the editor responsible for this story:
Peter Elstrom at
pelstrom@bloomberg.net
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Article source: http://www.bloomberg.com/news/2011-12-30/verizon-defends-2-convenience-fee-.html
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