Verizon Wireless was pulling a Netflix of sorts. In the midst of three unexplained data outages in less than a month, the wireless carrier decided to start charging customers a $2 fee to pay their bill on its Web site. To say that customers got angry would be an understatement.
However, the company has now reversed course, with notice dated Dec. 30 on its site, indicating that Verizon Wireless will not institute the planned "single payment fee."
According to that statement, "Verizon Wireless has decided it will not institute the fee for online or telephone single payments that was announced earlier this week.
"The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions. The company continues to encourage customers to take advantage of the numerous simple and convenient payment methods it provides."
How the Fury Began
The company announced on its Web site Thursday, Dec. 29 that a new $2 payment convenience fee would be instituted for customers who make single bill payments online or by telephone.
The new charges were to become official beginning Jan. 15, but customers didn't waste any time complaining about the "convenience fee."
Indeed, the social-media world has been abuzz with complaints over the new fee in a way that's reminiscent of the recent Bank of America debit-card-fee drama. Bank of America backpedaled under pressure.
At first, Verizon held its course regarding the new fee. Although the company now blames its data outages on growing pains, the company took a little time to respond to the latest complaints.
Worst Move Ever?
"As if Verizon doesn't make enough money already. I prefer to not use the automatic payments so that I can make sure I have enough money in my account each month. I always pay my bill within a few days of receiving the e-mail," Christina B. wrote on the Verizon Wireless Facebook page Friday morning. "How about you reward the people who pay on time, instead of punishing them?"
Meanwhile, Matt B. wrote, "I hope you enjoy losing almost $200 a month because you wanted to get another $2 out of me." Others took the occasion to start complaining about Verizon's Total Equipment Coverage. Still others reverted to the good old-fashioned "boo" on the wireless carrier's Facebook page. One Facebook follower posted the e-mail addresses of Verizon executives.
"OK, so I see you want to charge me $2 to pay my bill online. I have 15 months to go on my contract. I have figured I can cut $100 a month off my bill," writes Bentz K. on Verizon's Facebook page. "So, I will trade you my savings of $1,500 for your rip-off of $30. Then, when my contract is up, I will move my phone lines to another company and you will lose that income stream too. So, enjoy your $2 a month while you lose in the long run. Worst move ever by you, Verizon."
"Part of this uproar is based on an incomplete or inaccurate consumer understanding of what's going on. The belief initially was that Verizon was going to charge people for making all online bill payments. It's only 'one-time' payments, according to the company," clarified Greg Sterling, principal analyst at Sterling Market Intelligence.
More broadly, people believe there are zero costs incurred by Verizon for online billing, he said, so there's a perception that the company is trying to take advantage of customers unfairly or unjustifiably.
"This PR snafu isn't as bad as Netflix, which had several in a concentrated period of time," Sterling concluded. "But it does illustrate how companies are no longer at liberty to simply impose changes unilaterally on the public without risk to their reputations and brands."
In response to the backlash, Verizon emphasized that it takes "great care" to listen to its customers, quickly reversing the fee-plan that created the avalanche of negative publicity.
"We believe the best path forward is to encourage customers to take advantage of the best and most efficient options [referring to automatic payments, rather than one-time payments], eliminating the need to institute the fee at this time," said Dan Mead, president and CEO of Verizon Wireless.