Verizon Family Plan Overbilling Ends in $64 Million Settlement

Earlier this week, Verizon Communications, Inc. agreed to a $64.2 million settlement as part of a class action lawsuit over its alleged overbilling of Family SharePlan participants. The suit, overseen by U.S. District Judge Jose L. Linares, was filed after customers claimed Verizon was charging Family SharePlan users a higher rate for overtime minutes than was advertised. Customers also alleged they were charged for in-plan calls despite the company promising these would be free. The settlement, submitted for approval on October 27, includes more than $35 million in cash payments to those affected.

What Happened?

Verizon’s Family SharePlan, first advertised in 2001, offered users the chance to share a set amount of minutes with up to four members every month. The plan’s fees were set at a monthly rate, meaning that – in theory – users would not need to pay more as long as they didn’t use extra minutes. When overtime minutes were used, a new rate applied – but consumers claimed in the lawsuit that Verizon billed those overtime minutes at a higher rate associated with the plan’s “secondary” phones, and not at the lower “primary” rate given to the Family SharePlan’s main line. Even if overtime minutes were used for calls made on the primary phone, the suit alleged, the rate applied was that of the secondary accounts – meaning that customers were being charged more than they thought. The suit filed in New Jersey alleged that this was deceptive and, what’s more, that Verizon was aware that the true rates were not being adequately disclosed to its customers.

Who’s Affected?

The claims outlined in the suit go back to 2006 and as many as two million Verizon Family SharePlan customers may be affected. Although the exact number is not yet known (motion for approval of the settlement has only just been submitted), you can rest assured that multiple attempts will be made to contact those who qualify for the settlement. The motion currently sets out plans for Facebook advertisements, Internet banner advertisements, and notices in People magazine and other publications.

How Do I Claim Money?

The settlement as it stands is divided into two parts: $36.7 million in cash payments from Verizon and $27.5 million in PIN-accessed calling units. These calling units equate to free calls and data for those affected by Verizon’s overbilling, and will be accessed by entering a PIN provided by Verizon to qualifying consumers.

When Will That Happen?

The motion submitted to Judge Linares sets a deadline of February 2015 for any objections, with final approval set for March 2015.