Smart SpendingSmart Spending

Verizon drops $2 'convenience' fee

The carrier proposed charging a $2 fee each time a customer pays a wireless bill online with plastic. The backlash was immediate and intense.

By MSN Money Partner Dec 30, 2011 6:16PM

This post comes from Alex Sherman at partner site Bloomberg Businessweek.


Bloomberg Businessweek on MSN MoneyVerizon Wireless, the largest U.S. mobile carrier, canceled a planned $2 "convenience fee" for online and phone bill payments after a backlash from consumers and scrutiny from the Federal Communications Commission.


The company made the decision in response to customer feedback, according to a statement today on the carrier's website. The company on Thursday said it planned to impose the fee on users who make single bill payments on a month-to-month basis online or by phone. Post continues below.

Customers began criticizing Verizon Wireless on Twitter and online-discussion forums after the Basking Ridge, N.J.-based company disclosed the fee, with some setting up online petitions and calling for consumers to boycott the carrier. The FCC today said it was "concerned" about the plan and that it would investigate.


"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," Dan Mead, chief executive officer of Verizon Wireless, said in the company's statement.


Verizon Wireless said earlier it would add the fee to address costs it incurs for processing the single payments. The charge wouldn't have applied to customers who enroll in automatic payment plans, use electronic checks, pay at a Verizon Wireless store, send in checks or pay through their online banking website.


Verizon Communications Inc., which co-owns the wireless business with Vodafone Group Plc, rose 0.3% to $40.18 at 3:37 p.m. EST. The stock had advanced 12% this year before today.


Boosting earnings

Last month, a consumer backlash led to Bank of America Corp. canceling a $5-per-month fee for debit card users.


Verizon Wireless is driving up profit at parent Verizon Communications as it gains users for Apple Inc.'s iPhone and Google Inc. Android devices, which let users browse the Web, watch video and stream music. Third-quarter net income at New York-based Verizon Communications doubled to $1.38 billion from $659 million a year earlier.


More on Bloomberg Businessweek and MSN Money:

Dec 30, 2011 6:50PM
They didn't learn from BofA and Netflix? lol
Dec 30, 2011 6:58PM
Customers need to scrap Verizon as you know as well as I know they are going to find ways to pile on the fees so the CEO can maintain his $15 million plus salary at the expense of fare rates for their service.
Dec 30, 2011 7:03PM
These big companies need to learn that we're just not going to sit still for their cr@p anymore. 
Dec 30, 2011 7:04PM

Let this be a lesson to all businesses in the world. At some point consumers will retaliate over what you may perceive as a little change.

Dec 30, 2011 7:19PM
Why can't we do the same with Congress?
Dec 30, 2011 7:00PM
Let's all watch Verizon join the failed three ring circus from Netflix and B of A.  Corporate idiots should sum it all up into one topic.  There's some idiot at Verizon presenting the case for charging $2 to pay your bill using a credit card and the top exec's fell for it.  A word of advice to the CEO of Verizon, get rid or that idiot who came up with this idea.  Your company would fall like Sapcelab did.  At&T is looking real good right now. F-ing idiots.
Dec 30, 2011 7:04PM
Eric Edson has it right.  Verizon will find another way to get that money. It will be in the form of a hidden charge that you think is a normal increase or something.  Advice given would be to drop Verizon and find another carrier.  Paying by a credit card on line is the easiest way to do this.  At least you have a chance to review your bill before you give them your money.  Automatic deduction will only create you problems when you find out there was an error on your bill. ONce they have the money, getting it back is a pain in the butt.
Dec 30, 2011 7:37PM
These arrogant corporations just can't seem to remember who pays their  salaries
Dec 30, 2011 7:25PM
Another Big company trying to make more money. Here is the deal, it costs to have a website, they try to pass that cost to the consumer. Have you ever heard of "Cost of doing business"?? STOP trying to NICKLE AND DIME US TO DEATH!!!!
I made it real convenient by scrapping Verizon completely.  Their customer service at best stinks.  If they can't meet my needs, who needs them?
Dec 30, 2011 7:33PM
Even though they are reversing their decision Verizon customers still need to dump them!  These greedy SOB's need to learn that they can't even think about proposing these fees and increases without any reprecussions!  The sickest part is that their profits doubled from a year ago.  What on earth do they need to charge a $2 fee for?  Oh yeah, to buy another yacht, another mansion, etc.  Use that money to bring their customer service jobs back to America and improve their service!  We the people do have power through our words and actions! 
Dec 30, 2011 7:40PM
Just maybe we don't need to use Verizon! - Do you hear me NOW???!!!
Dec 30, 2011 7:54PM

I'm tired of paying such high monthly fees.  Verizon has the worst plans ever for family plans.

You can't tell me the cell phone companies can't charge less for plans, data, texting.  They make millions in profit.  Just like the gas companies they make billions in profit but keep raising gas prices.  And, they expect us to pay more..... It's crazy.   

Dec 30, 2011 7:25PM
LOL, I love it. If they dont come down on plans I am moving my 3 phones to another provider.  My contract is almost over!!! YEEHAA!!
Dec 30, 2011 8:00PM

Okay, we have shown what we can do when outraged against big corporations. Let's see what we can do against politicians who do not have our well-being on their minds, but just the interests of Corporate America.

Come on people, stop listening to the nonsense broadcasted on TV! Start voting with your checkbooks in mind, and focus on your  financial advantage instead of  promoting the wealth of CEOs and COOs. Trust me they won't create more jobs unless they are forced to .  

Dec 30, 2011 7:18PM
Are these companies not paying attention? Seriously! Every new fee and some price increases are being met with the worst PR possible. I'm all for a company doing what it needs to do to make money but you don't make money by pissing off your customer base. It seems like CEOs need to take a crash course in Commonsense 101.
Dec 30, 2011 7:37PM
So the customer gets screwed for paying their bill!  Nice!
Dec 30, 2011 7:35PM

The "Convience Fee" was insane.  Everytime Verizon or a company recieves a payment from a customers credit card, Verizon/company has to pay the credit card companies a small fee, this is one way the credit card companies make money and IT IS VERIZON/THE COMPANY WHO IS RESPONSIBLE for paying that fee because it is a product that Verizon is purchasing from the credit card companies.  However, Verizon and many other corporations decided "hmm, lets make our customer pay one of our bills for us."  It is a VERY UNETHICAL business practice for Verizon to do.  But there not the only ones either, many other corporations and companies out there are doing the same thing. 

To put it another way for people who dont understand this concept, ask Verizon to pay your electric bill this month.

Dec 30, 2011 7:32PM

I wouldn't pay them a thing that isn't covered in their infernal service contract...i.e that document which serves as a record of you selling your soul to the devil er uh I mean Verizon.


As others have stated, I hope they suffer similar to Bank of America and Net Flix.


The nerve of them charging a fee to accept payment.  What a seemingly stupid concept.

Dec 30, 2011 7:26PM
OH WOW!  How dumb can these companies be?  Everybody knows that's cheaper than processing incoming checks by mail, just like the banks save money with debit cards instead of keeping live tellers busy!   Greed, greed, greed!  Luckily, the populace is not that stupid!

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.