Verizon's class-action settlement payments are well under expectations
A little over a year ago, Verizon settled a class-action lawsuit for $100 million. The nation's largest wireless carrier was accused of charging its postpaid customers "a monthly Administrative Charge and/or Administrative and Telco Recovery Charge (collectively, 'Administrative Charge') that was unfair and not adequately disclosed." The settlement called for Verizon to pay current and former customers who were with the carrier between Jan. 1, 2016, and Nov. 8, 2023, as much as $100 apiece.
According to the settlement, Verizon agreed to start with a base payment of $15 plus $1 for every month that the claimant was a Verizon subscriber. To reach the maximum $100 payout, one would have had to been a Verizon customer for 85 months or just over seven years. These payments started going out earlier this week and current and former Verizon customers started receiving their settlement payouts via Venmo, PayPal, or a virtual prepaid Mastercard.
A Verizon customer gets his share of the settlement proceeds via Venmo. | Image credit-X
Many were disappointed with the settlement amount they received. Some received a deposit of $14.81 while others were sent $4.89. The person behind the Tech life Channel posted on "X" that he received a virtual prepaid Mastercard in the amount of $3.27. Another Verizon customer took to his social media account to show that he received a Venmo payment of $2.51 for his share of the settlement.
Some claimants received a virtual prepaid Mastercard. Note the amount! | Image credit-X
There are various factors that determined the final payout amounts including the number of claims received and the final legal fees. Those who were Verizon customers for longer periods of time were set to receive higher payouts but the number of claims must have exceeded estimates. This resulted in a reduction in the amount each successful claimant received from the Settlement Administrator.
"In the event the aggregate Settlement Payments across all Valid Claimant accounts exceed the Net Distributable Funds, the Settlement Payment issued to each Valid Claimant account will be reduced on a pro rata basis, as determined by the Settlement Administrator."-Verizon settlement website
As noted, the fees charged by the attorneys handling the case can also consumed a large chunk of the settlement money. In this case, lawyers received a healthy $33 million of the $100 million settlement. The 33% cut awarded to the attorneys is pretty typical for a class-action suit.
Besides forcing Verizon to pay its current and former customers, the settlement also required the carrier to amend its customer agreement to include revised Administrative Charge disclosures. As a result, Verizon subscribers will know in advance that these fees, previously undisclosed in Verizon's advertisements, are being charged to them.
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