Thousands of current and former Verizon FiOS customers who believe the company misrepresented the service's costs when they signed up may be eligible for money from a state settlement announced Wednesday.
The telecommunications company agreed to pay about $1.375 million to Maryland customers who the state's Consumer Protection Division says were improperly charged termination fees or had to pay for "inadequately disclosed" equipment costs in order to use the service, according to the attorney general's office.
The firm also agreed to pay a $250,000 penalty to the state, and $75,000 in costs.
The settlement ends an investigation that started more than six years ago, as Verizon introduced its high-speed fiber television, Internet and phone services.
Customer complaints at the time included allegations that the firm did not honor promises of promotional items, such as televisions and gift cards; failed to notify them clearly about fees for equipment necessary to access the services; and charged early termination fees when households wanted to cancel because they didn't receive what they expected.
"Verizon's activities when it was rolling out FiOS established it as one of our office's biggest complaint generators," Attorney General Douglas F. Gansler said in a statement. "I'm pleased that Verizon is changing its marketing practices to accurately reflect the total cost of its services and that a significant number of consumers will receive restitution as a result of this agreement."
Verizon reached a settlement in 2009 over similar claims in New Jersey.
Under the terms of Maryland's deal, Verizon did not admit to violating Maryland laws, but committed to advertising the cost of its services more accurately, providing clearer written information about subscriptions and allowing broader cancellation rights if the first bills do not accurately reflect orders. It also agreed to participate in the state's mediation and arbitration programs to settle future complaints.
In a statement, spokesman Harry Mitchell said the company has improved its service since FiOS started in 2008, addressing "many of the issues raised by the Consumer Protection Division."
"While Verizon's advertising practices complied with all laws and regulations, it's in the best interest of all parties for us to resolve this long-running matter so that we may continue our focus on providing Maryland consumers with a superior product and a good customer experience," he said.
Current or former customers eligible for the settlement are to be contacted by the state or the company. FiOS is available in Anne Arundel, Baltimore, Harford, Howard, Montgomery, Prince George's and Charles counties.