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Era of consumer backlash: Verizon cites 'feedback' and scraps $2 fee

Less than 24 hours after news of the fee began blazing around the Internet, Verizon said it would not charge customers making a one-time bill payment online or by phone.

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Guests use HTC's latest smartphone, the Rezound, during its launch event in New York last month on the Verizon Wireless mobile service. On Dec. 30, 2011, Verizon backtracked on its plans to charge a $2 fee for onetime online bill payments. The Verizon fee was scrapped after a consumer backlash.

Brendan McDermid/Reuters/File

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Call 2011 the year of the successful consumer revolt in the USA.

First Netflix and Bank of America backtracked on announced changes their customers didn't like. Now, on the year's final business day, it was Verizon's turn.

Verizon Wireless says it is scrapping plans to institute a $2 fee when customers make a one-time bill payment online or by phone.

The company had framed the new policy as a way to cover transaction costs, but it sparked a storm of criticism, targeting one of the nation's most successful wireless providers.

In the earlier instances, Netflix reneged on a breakup of its Web-streaming and DVD-by-mail lines of business. And Bank of America announced new debit-card fees, only to retract them as customers rebelled.

Can you hear me now, corporate America?

Loud and clear, apparently. At least when consumer unrest might have big implications for the bottom line.

"Verizon Wireless has decided it will not institute the fee for online or telephone single payments," Verizon said in a statement, less than 24 hours after news of the fee began blazing around the Internet. "The company made the decision in response to customer feedback about the plan ...."

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The consumer wins are at least loosely related to a broader pattern of activism worldwide. Time magazine recently named "The Protester" as its person of the year.

However, overturning a fee is hardly the same as toppling a government in the Middle East. (And for the record, some businesses are succeeding at raising fees or prices.)

But the recent corporate-backlash incidents symbolize what appears to be an increasingly empowered consumer – motivated by tight financial times and enabled by the echo chamber of social networks like Facebook and Twitter.

Part of Verizon's strategy behind the $2 fee, Industry analysts say, was to coax more customers into automated monthly payments of their wireless bills, saving transaction costs for the company.

In its statement late Friday, the company sounded as if it will now pursue that goal through something more akin to carrots than sticks.

"We believe 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,” said Dan Mead, CEO of Verizon Wireless.

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