Verizon Drops "Convenience Fees" Following Backlash

UPDATE: Well, that was fast.

Verizon has scrapped plans to charge customers a $2 "convenience fee" to pay bills online or by phone, the company announced Friday afteroon. The reversal came just hours after news broke that the FCC was planning an investigation of the fees.

"We take great care to listen to our customers," Verizon Wireless Chief Executive Dan Mead said in an emailed statement, according to the Wall Street Journal. "The best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time."

Customers were already circulating online petitions asking the company to drop the fees, the Journal noted. One was started by Molly Katchpole, the young woman who gathered 300,000 signatures on an online petition against Bank of America's plan earlier this year to charge monthly fees for debit card use.

Reuters reports that a petition on Change.org against the Verizon fees had already garnered some 95,000 signatures. Change.org's chief executive, Ben Rattray, declared in a statement, "The era of corporations walking roughshod over consumers without consequence is officially over."

UPDATE Friday at 3:43 p.m.: And now the FCC is planning to investigate, Fox News reports.

"On behalf of American consumers, we're concerned about Verizon's actions and are looking into the matter," an unnamed FCC official told FoxNews.com. The scrutiny apparently comes in response to news that the leading wireless carrier plans to charge customers a $2 "convenience fee" for certain bill pay options, including one-time online and over-the-phone payments.

Fox News has more on the ongoing backlash.

UPDATE Friday at 11:34 a.m.: The last week of the year has not been a good one for Verizon.

Not only is it dealing with an Internet backlash over its new convenience fees, but it vaunted 4G data network suffered its third outage of the month. In an interview with the tech blog GigaOm, a top company official blamed the spotty service on "growing pains."

“Being the pioneers, we’re going to experience some growing pains,” the official said. “These issues we’ve been experiencing are certainly regrettable but they were unforeseeable.”

Verizon, the country's largest wireless carrier, was the first to roll out a nationwide 4G LTE network. Each of the recent outages has been caused by a different bug, the company said, and it can't promise there won't be more.

Meanwhile, the New York Times reports that the company took serious heat for its plan to charge customers a $2 "convenience fee" for certain bill-pay options. Angry customers circulated online petitions hoping to force the company to drop the plans, charging that they will hurt the poorest cell-phone users, who live paycheck-to-paycheck and can't afford automatic bill pay.

A Verizon spokesman attempted damage control, telling the Times, "These fees are going to cover the costs of those last-minute payments. We don’t want anyone to have to pay this.”

But an analyst noted that online payments usually don't require a third party, so it's hard to understand why they would cost the company money.

POST Thursday, Dec. 29 at 3:41 p.m.: Here's our bold 2012 prediction: Verizon customers won't be happy with this.

The cell phone company says it will impose a new $2 fee beginning next month on anyone who uses a credit card to make a single bill payment via the Verizon website or through the company's automated phone service. 

News of the additional fee leaked along with a corporate memo earlier Thursday, and the company has since confirmed to news outlets that it will indeed tack on the additional charge starting Jan. 15.

Customers can avoid paying the extra two bucks every month a handful of different ways, the easiest likely being by setting up an automated payment (for example, through Verizon's AutoPay feature). Other options include paying at one of the store's bill payment kiosks or going old school and actually mailing in a paper check. Those credit card users who make a one-time payment on the Web or over the phone, however, will be greeted with the less-than-friendly news that they'll need to pay an extra $2.

CNET's Marguerite Reardon, who knows much more about this type of stuff than we do, with more: "Verizon's plan seems to make little sense, given that the company offers several ways to avoid the fee. Verizon didn't elaborate on why it's charging this fee. My guess is that the company that clears these payments is charging Verizon a fee that Verizon is passing on to customers. Still, it seems ridiculous that paying a bill online or by phone could cost Verizon more than processing a hand-written check or money order that is sent to the company through the regular mail."

The Associated Press notes that AT&T has also attempted to convince subscribers to go the auto-pay route, although by using carrots instead of sticks: The company offers a $10 gift card to customers who set up an automatic payment account. 

The Verge also has more details on the Verizon fee here.