Why are Verizon customers receiving settlement payments?
You might have heard about Verizon settlement payments hitting bank accounts, but why are these payouts happening? In January 2024, Verizon agreed to pay $100 million to settle a class-action lawsuit. This lawsuit accused the company of charging undisclosed administrative fees to U.S. customers who had postpaid wireless plans.
The fees, referred to as “Administrative Charges” or “Administrative and Telco Recovery Charges,” were allegedly implemented and increased in a deceptive manner. Between January 1, 2016, and November 8, 2023, if you have been a Verizon customer and paid these fees, you are eligible to file for the claim.
How much money are customers receiving?
If you are wondering how much you might receive from this settlement, the answer depends on several factors. According to the settlement details:
- The minimum payment was estimated to be $15, plus $1 for every month you were charged the administrative fees during the qualifying period.
- The maximum payment was projected to be around $100.
Nevertheless, most claimants have received considerably lower final payout amounts. Here is why:
- The settlement fund of 100 million dollars has to cover all eligible claims, legal fees, administration costs, and incentive awards to class representatives.
- Payments were adjusted on a “pro-rata basis” if the fund was insufficient to meet the amounts originally calculated.
This means that a lot of Verizon customers have received as little as $2 or $3. Some are reporting payments of about $4.89 or $14.81.
Why are the payouts so small?
You are not the only one disappointed with payoffs. Many Verizon customers flocked to social media platforms to express their dissatisfaction. But here are the reasons that have clearly led to lower-than-expected payments:
- The high volume of claims: The settlement has a high valid claim and therefore affected the total amount paid to each person.
- Attorneys’ fees and costs: Some of the $100 million fund went toward paying administrative expenses and so were less available for distribution.
- Prorata: Payments were lowered to make sure that all valid claims could be paid out from the remaining fund.
Thus, in spite of the fact that the settlement guaranteed a minimum payout of $15 per customer, these reasons made that amount even lower.
How will you receive your payment?
If you filed for this claim, your payment should arrive via the method you selected—either as a direct deposit to your bank account or through digital payment platforms like PayPal or Venmo. Here are a few tips to ensure you do not miss your payment:
- Check your bank account or digital wallet for deposits labeled “Verizon Settlement Payment.”
- If you have not received your payment yet, keep an eye out. The settlement administrator has stated that payments are being distributed in early January 2025.
- Contact the settlement administrator if you believe your payment is delayed or missing.
Will Verizon stop charging these fees?
Even with the settlement, Verizon is yet to stop charging administrative fees at the core of the lawsuit. Instead, it has pledged to enhance disclosure of those fees in customer agreements.
Here is what Verizon customers need to know:
- Charges to appear on bills as administrative fees but with clearer explanations about what they cover.
- Review your monthly statements for reference on such charges and comparisons of total bills.
Customer reactions to the settlement payouts
It is no surprise that many customers are unhappy with their payments. Social media is buzzing with comments from people expressing disappointment:
- One user wrote, “Got my payout from the Verizon lawsuit… These lawsuits are a joke… Not even $15 bucks.”
- Another shared, “I applied a while ago and just got $3. It is not worth the wait!”
