Verizon Wireless has agreed to settle a lawsuit from the New York attorney general’s office claiming the carrier’s advertisements for its unlimited data service were deceptive. As part of the settlement, Verizon Wireless will pay a total of $1 million to affected customers.
According to a statement from the office of the state’s attorney general, Andrew Cuomo, the settlement follows a nine-month investigation into wireless data plans that Verizon Wireless marketed as unlimited “without disclosing that common usages such as downloading movies or playing games online were prohibited. The company also cut off heavy Internet users for exceeding an undisclosed cap of usage per month.”
Cuomo’s office found that from 2004 until April of this year, Verizon Wireless canceled service to more than 13,000 customers for “excessive” use of its wireless data plans. The AG said that the carrier did not offer refunds for the devices customers purchased for the service.
Cuomo’s office said that, as of April 2007, Verizon Wireless had stopped cutting off heavy data users.
The AG said that, as part of the settlement, Verizon Wireless has agreed to reimburse former customers for the cost of the PC cards or cellphones they had bought for the service, the cost of which the carrier estimated at about $1 million total. Verizon Wireless also will pay penalties and costs of about $150,000, and will revamp its advertising.
“For the vast majority of users, our broadband EV-DO network will provide everything they need for Internet access,” Verizon Wireless spokesman Jim Gerace posted on the company’s Web site. “Some customers-current and former-will hear from us soon with how they may be impacted from our agreement with the NY AG.”
In the offending ads, Verizon Wireless called its $60 per month data plan “Unlimited Broadband Access.” In fine print at the bottom of the ad, however, the carrier noted that if usage exceeded 5 GB, “we presume use is for non-permitted uses and will terminate service.”
Verizon Wireless’ new ad drops both the “unlimited” description and the mention of the 5 GB limit.
“It’s awfully nice to have this behind us,” said Verizon Wireless spokesman Jeffrey Nelson.
He emphasized that the agreement with the AG’s office was voluntary, and that the settlement did not represent an admission by the carrier that its advertising was deceptive, as Cuomo’s office claimed.
