Last year, Verizon customers participated in a class action lawsuit that resulted in a proposed settlement of $100 million due to the company’s alleged practice of imposing undisclosed administrative fees. Customers anticipated a significant payout, with the settlement agreement suggesting they could receive as much as $100 each.
However, disappointment ensued as payments began to be distributed. Many individuals reported receiving considerably lower amounts, with some getting as little as $2.37 on a Mastercard gift card, and others receiving $4.89 or $14.81 transferred to their PayPal or Venmo accounts.
The settlement outlined that each valid claim would receive a minimum of $15, with an additional dollar for every month of service the customer had been with Verizon while incurring the disputed fees, capping at $100. Unfortunately, the final amounts issued fell short of these expectations.
The disparity in payout amounts is attributed to several factors, including the total number of claims filed and the final legal costs. It was noted that if the total payouts exceeded the Net Distributable Funds, each claimant’s payment would be proportionately adjusted. Furthermore, taxes and fees from payment services selected by claimants could also alter the total received.
The lawsuit allowed current and former Verizon customers who were charged administrative fees from January 1, 2016, to November 8, 2023, to file a claim, with a deadline set for April 15, 2024. Despite the lawsuit, Verizon denied any wrongdoing, asserting that it fully disclosed all charges during transactions and in various customer communications. As part of the settlement, Verizon has agreed to enhance its disclosures regarding administrative charges in its Customer Agreement.
This situation underscores the complexities involved in class action settlements, where expectations may not always align with outcomes. While the amounts received may be disappointing, the settlement has prompted Verizon to adjust its business practices, potentially leading to clearer disclosures in the future.
In summary, while many Verizon customers expected higher payouts from the class action settlement, the actual amounts distributed were significantly less due to a variety of factors. Nevertheless, the case has prompted Verizon to enhance its transparency regarding administrative charges, which could ultimately benefit its customers in the long term. This change illustrates the positive outcomes that can arise from collective action and legal recourse.