Verizon Wireless Reaches Settlement

Verizon Wireless Inc. agreed Friday to provide as much as $600 million in discounts to settle a lawsuit with customers nationwide who claimed the biggest U.S. mobile-phone carrier hid service charges.

Cell-phone customers sued Verizon and predecessors two years ago in Superior Court in San Diego, claiming they didn’t fully explain special offers and hidden charges for rounding up calls to minute increments, operator assistance, busy signals, service-switching, contract cancellation and local and long-distance tolls.

Under the settlement, subject to approval by Judge William Pate at a Sept. 25 hearing in San Diego, customers will receive coupons for a $15 credit on a new 1-year contract or $30 on a 2-year contract; or $15 off on items bought from Verizon; or a hands-free headset that fits most mobile phones.

The judge gave preliminary approval to the coupon agreement in April.

Verizon denies the allegations in the lawsuit and plans to issue “a new, uniform customer agreement” approved by the plaintiffs’ lawyers, according to the company’s Web site and documents mailed to customers this week.

“The real value of the settlement is our new customer guide” to explain the company’s services and billing practices, said Verizon Wireless spokeswoman Nancy Stark.

About 40 million customers are eligible for the discounts. The cost to Verizon Wireless depends on the number of people who use the coupons, Stark said.

Bedminster, N.J.-based Verizon Wireless is a joint venture of Verizon Communications Inc. and Vodafone Group.

As part of the settlement, Verizon Wireless has agreed to pay plaintiffs’ lawyers as much as $7 million in legal fees and expenses, which must be approved by the judge.

Verizon Communications’ shares rose 92 cents to $40.15 on the New York Stock Exchange. Vodafone shares fell 20 cents to $13.65, also on the NYSE.