Verizon Caught Taking Excess Payments

US telco Verizon has reportedly taken up to USD400 excess in payment from more than 200 of its customers. The payments were taken automatically from customer bank accounts… even though the customers had already paid in full. You can read more about the story here.

Verizon blamed the problem on a ‘system glitch’. Once again, a telco is guilty of trying to blame systems, when the problem is with people and how they work. All systems are designed, built and operated by human beings with a real responsibility to get things right. And then there are people employed to check the systems work right, which is where the Revenue Assurance function comes in. Talking about systems is a way of hiding from the fundamental truth that people are responsible for the decisions they make – both good and bad – and that people working at Verizon have let their customers down.

Verizon seems to have a deplorable attitude to its customers. In another recent story, they billed a dead woman USD110 for an internet service they never supplied (see here). In this latest excess payments episode, Verizon allegedly accused a complaining customer of being ‘rude’. What a surprise! A telco helps themselves to money they do not deserve, fails to take the customer’s complaint as seriously as they should, and then has the cheek to lecture customers about being polite. This is the kind of behaviour that gives all telcos a bad name. Meanwhile, in a comic twist that can only make people wonder about the real worth of revenue assurance, the TM Forum has just published an overview of Verizon’s Revenue Assurance program (see here). What is the objective of Verizon’s RA program?

To prevent customers from ever seeing an incorrect bill.

I could comment on their success and whether they should be telling others how to do revenue assurance… but my comment would be rude.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

4 Comments on "Verizon Caught Taking Excess Payments"

  1. This is… a MUST read

  2. Eric,

    I agree. Verizon can’t hide behind the “systems glitch” excuse. And you can bet that a flesh-and-blood somebody or two was taken to task for these errors behind closed doors.

    You point to the key issue: an over-reliance on automation and cutting corners by neglecting to have enough trained eyeballs looking at the bills.

    For the past few years Verizon, particularly the FiOS division, has been put on a pedestal as a forward-looking service provider in terms of RA automation. In fact, I contributed somewhat to the elevation of Verizon on that <a href:>pedestal</a&gt;.

    First of all, I can vouch for the integrity and competence of the Verizon RA leaders I’ve gotten to personally know at private meetings and conferences. But the devil is in the details: RA is hard to do, especially if you’re billing FiOS services with lots of la carte services with a frosting of promotions on top.

    Now as a Verizon small business customer for 18 years, I’ve seen Verizon up close for a long time. And in that time, I’ve had an occasional disagreement with their wireline division. But on balance, Verizon has been fair to me.
    There have been times when I didn’t pay my phone bill for a few months and they didn’t cut me off even though they had every legal right to do so.

    Now I remind you that I am a true-blooded American. And we Americans consider it our birthright to tell our best telco customer service horror stories at school picnics and family gatherings :- )

    My last point is regarding the $110 charge to a dead woman who didn’t get her internet service. On this one, I suspect the LA Times was looking for a juicy story to help sell newspapers. It was an entertaining story to read, but it hardly paints a picture of Verizon’s overall billing quality.

    When you bill for 140 million access lines, you’re going to have issues. In fact, in the age of Twitter, it’s surprising we don’t have even juicier horror stories in print. Hmm, maybe Verizon’s billing and RA is not so bad after all.

    In the past several years, there have been some high profile stories of violence and murders in American high schools. But can you infer from that America’s 27,000 high schools are unsafe. The internet tends to magnify these stories out of all proportion. As “Fooled by Randomness” author Nassim Taleb would put it, it’s another case of people “falling in love with the narrative”.

    • @ Dan,

      As always, you come back with some great arguments.

      First off, I want to clarify something. I do believe that ‘systems’ are at fault… but when I talk about ‘systems’ I talk about something different to what’s referred to by the phrase ‘system glitch’. The system I like to talk about is the way the business works, from top to bottom. And the important point about this system is that decisions by people at the top have the most influence on the way the business works. So when I point fingers at people in telcos, I’m not singling out the people who work in RA. They have influence, but I’m a realist about how much influence they have. Even if only one customer is overbilled by one cent, the first person to challenge is the CEO, asking whether they have their priorities right, and whether they made bad decisions that fosters a system that rationalizes making mistakes over delivering on promises.

      Second, if you accept the truth that the responsibility for quality flows from the very top, then you have to accept another truth: RA people are not at the very top, and they cannot exaggerate the extent of their success, any more than they should downplay their failures. One reason I love to rail about overbilling errors is that we often hear about how RA saved X% of revenues here, $X billion there, etc. Nobody outside of the telco’s RA function independently measures leaks, so there is no way to validate the claims. But customers do sometimes spot mistakes that nobody in the telco has spotted, most obviously when they have been overcharged. So every time a customer suffers a billing error, and lets the rest of the world know about it, they provide a very useful independent source of data on the quality of the telco’s RA. Note that I say “the telco’s RA”, because RA is an activity done by the business, not by one department. And I emphasize that for similar reasons: good RA comes from a good company with a good way of working. It is not the product of a good RA department and certainly not the result of expenditure on RA systems and checks. The best RA department and the best RA tools will fail in a poor business. On the other hand, the worst RA department will be flattered by a good business – because they won’t have anything to do!

      You make a great point about being fooled by randomness. I agree. A few anecdotal news stories here and there do not provide the data we need to form an opinion about real levels of error. But I counter with this… every time we see somebody come out with the pseudo-fact about X% of revenues leaked, why are these anecdotal unverified claims accepted at face value? They would also fail Nassim Teleb’s statistical conditions. But we know something about these claims that should make us even more sceptical about them, and less willing to repeat them. We know they will be biased. Yes, news coverage of overbilling will be biased too, which is why the story of a dead woman being charged $110 makes the headlines. But then, which newspaper would print a story that reads “11,000 customers were charged 1 cent too much”? It is the same absolute error, but it’s not a good story. And I’ve seen plenty of cases of overcharging that fall into this bracket of small but often. The worst thing with these errors is that customers usually don’t spot them, but they were still overcharged as surely as if Nestle sold chocolate bars which weighed less than stated on the packet.

      Dan, here’s really the crux of my argument. You write that “when you bill for 140 million access lines, you’re going to have issues”. Why? Why do we accept that as true? Does it have to be true? How many issues would be acceptable, and how many signify a badly run business where the CEO deserves a kick up the backside? How does the telco industry’s error rate compare to that in banking, or utilities, or the government’s error rate when collecting taxes?

      Let me use an analogy to illustrate my point. We know that as long as people drive on the roads, there will be people killed by car accidents. At the same time, people are far less tolerant/accepting of deaths caused by public transport, where there is an expectation that a business should carry the burden of responsibility for safety. Though incredibly emotive, we can analyze the data of accidents, learn from it, and improve the safety on roads, or of air travel, or even of the Space Shuttle (though she may lay to rest, the lessons will be carried over to future space vehicles). Human beings are often irrational, which is why they will take risks in cars but then get nervous about the reliability of their airplane. But we can chose to be rational in how we make decisions, and that starts with obtaining and using good reliable data, and knowing the limits of our data. At root, Nassim Taleb consistently points out how human beings fall short in this regard. When we have reliable data, we need to be truthful about finding where the failings were, and change things accordingly. With motor vehicle accidents, the problem may be poor driver tuition, or it may be a badly-designed bend in the road. With the Space Shuttle, the problem may lie with communication chains in NASA’s management team, or a miscalculation about the effects of a cold day on a rubber seal. Many failures will be due to a combination of failures at different levels. But whatever goes wrong, we can learn not to make the same mistake again. We can avoid future mistakes if we gather good data on what is going wrong and why. I don’t want RA practitioners to tell each other what is right. I want them to tell each other what is wrong. I want them to tell me what is wrong. I will learn more that way. We’re awash with presentations that share the good news about RA. I love bad news stories for RA, because, put simply, the data is more useful.

  3. David Leshem David Leshem | 14 Jun 2011 at 3:32 pm |

    Dan and Eric,

    As one that spent some years in the US, I can only add that everything is big in the US, the floods, the Tornado storm and even phone bills issues. I can recall when the CEO of E-plus stepped down due to 10% billing mistake related with SMS during the month of December, and yes, he lost his annual bonus.

    Somehow I can only lament that there are plenty of finger pointing and lack of managerial responsibility…I will leave with the challenge to read on Verizon website their “Company mission”
    “At Verizon Wireless, we are committed to offering our customers the most reliable service on the nation’s best wireless voice…”

    How you define “most reliable” – it bears legal definition. in some cases the legal implications are “Diligence beyond a mere good faith effort to fulfill an obligation”…
    Well I guess my point is clear.

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