‘Bait-and-Switch’ Class Action Alleges Verizon Hides Monthly ‘Administrative Charge’

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A proposed class action alleges Verizon charges higher monthly rates for wireless services than advertised by adding a hidden “administrative charge” to customers’ monthly bills.

The 53-page lawsuit says that although defendants Verizon Wireless and Verizon Communications Inc. advertise flat monthly rates for post-paid wireless services, subscribers ultimately end up paying an additional administrative charge—currently $3.30 per line—each month without ever consenting to or being informed of the fee.

The lawsuit alleges that although Verizon represents that the administrative charge is either a government surcharge or tied to the carrier’s operating costs, neither representation is true. In reality, the case claims, the charge is nothing more than a “fictitious construct” that allows Verizon to charge customers more per month than what they agreed to pay without having to raise its advertised prices.

According to the suit, Verizon has “improperly collected billions of dollars” in additional charges from customers through what the complaint describes as an unlawful bait-and-switch scheme.

As the lawsuit tells it, Verizon began “sneaking” the administrative charge into customers’ bills in 2005 at a rate of $0.40 per line. According to the suit, the charge has steadily increased over the years, most recently in June 2022 when Verizon raised the fee by 70 percent from $1.95 to $3.30 per line. Per the case, the current rate is more than eight times the original amount of the administrative charge.

The case says Verizon customers are never informed of the administrative charge prior to signing up for the wireless carrier’s services, and can only learn of the fee after they’ve received their first bill and are financially committed to a contract. Moreover, the charge is never mentioned on customers’ paper bills and shows up in the “Surcharges” section of the online bill, where it is “lumped together” with government charges, taxes and fees, the suit relays. The lawsuit claims that Verizon “explicitly and falsely states” on customers’ monthly bills that the administrative charge is imposed “to cover the costs that are billed to us by federal, state or local governments.”

Notably, the case says, Verizon changes its definition of the administrative charge on a support page on its website, where the fee is described as tied to the carrier’s operating costs. The lawsuit alleges, however, that this is “yet another misrepresentation” as the administrative charge has steadily increased while Verizon’s operating costs have significantly decreased over the same timeframe.

Summarizing, the lawsuit alleges Verizon’s administrative charge is in truth a “revenue lever to covertly jack up its monthly service prices and increase its revenues and profits whenever it desires.” 

The complaint notes that the plaintiffs in the case, Verizon customers, are not seeking to regulate the amount of the administrative charge but “merely seek to compel Verizon” to provide notice of the fee in its advertised prices; “honestly and adequately disclose” the charge in its billing statements and customer communications; and reimburse “any and all” undisclosed or inadequately disclosed extra-contractual fees.

The case looks to represent citizens of any U.S. state other than New Jersey and California who subscribed to a post-paid wireless service plan from Verizon and were charged and paid what the company labeled an “Administrative Charge” or “Administrative and Telco Recovery Charge” within the applicable statute of limitations period.

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