Verizon to Pay Customers $1 Million

Verizon has agreed to pay US$1 million to settle an investigation of the company's alleged deceptive marketing practices conducted by the New York Attorney General's office.

The settlement, which was announced Wednesday by New York Attorney General Andrew Cuomo, requires Verizon to reimburse $1 million to customers that the attorney general contends wrongfully had their broadband service disconnected. Verizon must also halt the "deceptive marketing" of its broadband services, Cuomo said.

At the heart of the attorney general's investigation were Verizon's advertisements that promised consumers "unlimited" broadband for its NationalAccess and BroadbandAccess services. A nine-month investigation by the attorney general found, however, that both plans were anything but unlimited.

In particular, the attorney general noted that the terms of service for Verizon's "unlimited" actually barred users from performing such high-bandwidth activities as downloading movies or playing video games online. When users were deemed to be "excessively using" their services, the attorney general said, they were cut off from service and unable to obtain refunds. The attorney general also said that these restrictions on high usage were not "clearly and explicitly disclosed" to customers.

Jim Gerace, Verizon's vice president of corporate communications, posted a message on the company's public policy blog saying that Verizon had voluntarily agreed to change the language it uses to market both NationalAccess and BroadbandAccess. To demonstrate how the company's marketing has changed, Gerace posted a link to one of its older ads, which promised consumers "unlimited broadband access" for Internet browsing, e-mail and Internet access. The newer ad, by contrast, promises only "broadband access" for those services.

"We are pleased to have cooperated with the New York Attorney General, and to have voluntarily reached this agreement," said the company in a statement. "At Verizon Wireless, we are committed to providing clear advertising for our products and services, and we began updating advertising for our NationalAccess and BroadbandAccess data plans earlier this spring."