Verizon Wireless to Distribute Cash, Free Calling in $64.2 Million Settlement of Billing Lawsuit

By Josh Long

Verizon Wireless has agreed to pay $64.2 million to settle a class-action lawsuit that alleged the mobile-phone giant improperly billed its subscribers.

Under the settlement, Verizon Wireless has agreed to distribute $36.7 million for the benefit of consumers, class counsel and the two named plaintiffs (Ralph Demmick and Donald Barth) who represented subscribers impacted by the company’s alleged unlawful behavior. The company also will provide class members with personal identification numbers to make domestic and international calls, with a value totaling $27.5 million and representing 275 million calling units, according to court papers filed in the U.S. District Court for the District of New Jersey. Gigaom, which reported on the settlement, provided a link to the documents.

The lawsuit alleged Verizon Wireless “mischarged Family SharePlan customers whose plans provided for different per-minute rates for ‘after-allowance’ minutes used by different phone lines; and (2) mischarged Family SharePlan customers for ‘In-Network’ or ‘In-Family’ calling when these calls should have been free under the customers’ plans,” according to a legal notice that will be provided to consumes under the settlement.

Class members who are covered under the settlement used wireless services between May 11, 2002, and May 10, 2006. Verizon Wireless has denied any liability or wrongdoing. The settlement is subject to preliminary and final approval by the judge overseeing the case, Jose L. Linares.

Wireless carriers’ billing practices have been under federal scrutiny lately. Earlier this month, federal regulators announced a record $105 million settlement with AT&T Mobility to resolve allegations that the company had charged customers millions of dollars for services they hadn’t authorized. And over the summer, the Federal Trade Commission filed a cramming lawsuit against T-Mobile USA.