Updated: Verizon reverses $2 fee after FCC inquiry, customer outrage

Update, 12:31pm PST: Verizon wireless has reversed its decision to institute a $2 fee on customers paying their bills online. The company released a statement confirming the about-face on Friday, a couple hours after the Federal Communications Commission decided to look into the fee. The statement reads:

Verizon Wireless has decided it will not institute the fee for online or telephone single payments that was announced earlier this week.

The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions. The company continues to encourage customers to take advantage of the numerous simple and convenient payment methods it provides.

“At Verizon, we take great care to listen to our customers. Based on their input, 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, president and chief executive officer of Verizon Wireless.

Verizon‘s new $2 service fee for one-off online payments came under the scrutiny of the Federal Communications Commission, according to a statement by the agency on Friday.

“On behalf of American consumers, we’re concerned about Verizon’s actions and are looking into the matter,” the FCC told the New York Times.

Verizon announced its new fee on Thursday, targeting customers who pay their bills one-at-a-time online or by phone. The fee, which would have cost consumers $2 per online credit or debit card transaction, puts emphasis on Verizon’s free methods of payment. These include signing up for autopay and automatic deduction from a bank account or electronic check. After receiving the news, customers quickly opposed the new plan, voicing opinions on social networks. The outrage might have also been spurred by three Verizon Wireless outages that occurred this month. The company explained the downtime was simply an issue of “growing pains” implementing its LTE 4G service, in a statement today.

Some irate customers organized an online boycott of Verizon on Causes.org. A similar boycott was held when Bank of America announced a fee for debit card usage, which the bank quickly retracted.

Verizon called this a “convenience fee,” though it really seemed to be an effort to avoid credit and debit card fees. As VentureBeat reporter Tom Cheredar pointed out on Thursday, customers have a reason to be concerned about signing up for an automated direct withdrawal system. Wireless carrier bills are notorious for being different every month. Many customers feel they have been over charged upon receiving a bill, and want to challenge those charges before making a payment. In fact, in 2010 Verizon admitted to over charging 15 million customers.

We have contacted the FCC and Verizon for comment and will update this post upon hearing back.

Image via Ian P. Miller/Flickr