Verizon (VZ) is the leading mobile provider in the U.S., with over 156 million customers nationwide.
The company has managed to maintain its momentum over the past few decades, and it recently faced a boost in profits due to strong growth in its pool of customers.
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In the third quarter of 2024, Verizon earned $19.8 billion in revenue from its wireless service, an almost 3% year-over-year increase.
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As the company continues to grow its profits, it further solidified its reputation of having higher prices than its top competitors in a bold new move that has frustrated some of its customers.
Verizon quietly makes a major adjustment
In a recent Reddit post, a Verizon customer sounded the alarm on an odd detail in their latest phone bill.
“I just looked at the online PDF of my current bill, and was met with a note that the Verizon fee is going up again,” wrote the customer in the post. “It'll now be $3.50 per voice line and $1.60 per data line.”
The customer clarified that the “Verizon fee” in question is the Administrative and Telco Recovery Charge, which Verizon claims helps to “defray and recover certain direct and indirect costs” its agents incur, according to the company’s website.
In an emailed statement to TheStreet, a Verizon spokesperson confirmed the price hike, stating that the change will take effect in a week and a half.
“Starting December 18, the monthly Verizon wireless Administrative and Telco Recovery Charge will increase by $0.20 per line for mobile voice (basic phones, Second Number, smartphones, etc.) and data-only (hotspots, tablets, etc.) products,” said the spokesperson. “Verizon Home Internet services are not affected.”
The $0.20 fee increase has sparked backlash from Verizon customers.
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Some customers even threatened to switch phone carriers in response to the change.
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Verizon recently implemented a series of price hikes
Unsurprisingly, some customers are frustrated with the fee increase as the company has been rolling out a series of price hikes recently. In March, Verizon raised the monthly price for its 5G Start, 5G Play More, 5G Get More and 5G Do More unlimited mobile plans by $4.
In August 2023, Verizon also increased the monthly rate for customers on its Go, Beyond, Above, and 5G Start unlimited plans by $3 after adding an additional $2 fee to a few of its older unlimited plans in February that same year.
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The company also recently reduced its autopay discount from $10 to $5 per month for customers on older phone plans.
Verizon faced lawsuit for allegedly being "deceptive" with its pricing
Verizon’s decision to increase its Administrative and Telco Recovery Charge comes after it recently settled a class-action lawsuit that alleged that the fee was “misleading.”
Customers who joined the lawsuit claimed that the fee wasn’t disclosed in the monthly price of their wireless plans, and that there were alleged discrepancies in what Verizon claimed the charge was actually for.
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“Verizon explicitly and falsely stated on its monthly bills that the Administrative Charge is a surcharge imposed on subscribers to ‘cover the costs that are billed to us by federal, state or local governments,’” reads the lawsuit. “Thus, Verizon’s monthly bills have served to further Verizon’s deceptive scheme and keep customers from realizing they are being overcharged.”
Verizon settled the lawsuit earlier this year for $100 million, which will be divided and paid to the class-action plaintiffs.
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