Clarification on Verizon’s Regulatory Charge and If You Can Use it to Get Out of that Contract

Earlier this month, Verizon customers started receiving a mailer (notification) that a Regulatory Charge on their bills could potentially increase starting July 7 which prompted a set of stories with details on how everyone could use this to get out of their current contract for free.  We now have some additional info to add to this situation that should clarify the fee itself and also if you can really use it to walk away without paying an ETF (early termination fee).  

One of our Big Red resources reached out and provided the following, which looks like a long and in-depth read, but it’s well worth it if for some reason you were looking to exit your contract.  And if you aren’t interested in reading all of that, we’ve summed it up for you down below.

1.)    Customers cannot use that notification to cancel their contract without early termination. This isn’t a case of semantics, it’s a simple fact. If you read the notification that was sent to customers it states that we may increase the regulatory charge by up to etc. The change hasn’t occurred yet. The change is, in fact, still being debated at extremely high levels and may not in fact happen. The letters were sent as a courtesy to customers to let them know that we MAY increase the regulatory charge.

2.)    Until the decision is made on 7/1, no changes have been made and no changes will be made.

3.)    The Federal Universal Service Charge is a federal/government tax. It is imposed at a carrier level to all carriers that provide cellular, pots, or broadband service. It is left up to the carrier if they choose to pass the charge along to customers. If they do, it is that carriers charge so an increase in it would count as a materially adverse change provided it was of sufficient magnitude. To be of sufficient magnitude, your overall bill would need to increase. If VZW chose to increase that charge but decrease another charge, there would be no material adverse effect. The Federal Universal Service Charge is assessed quarterly and is based on both revenue and total subscribers at a carrier level. It changes each quarter, and has gone up and down over the years. When it goes down, this is also reflected in the customer’s bills, but they are often not notified as it’s a change to their benefit. Othertimes, the charge increases but the carrier chooses not to pass the charge along to customers but leave the fee at its current rate. The FUSC will be increasing in quarter three, but the amount of the increase will not be announced until June 30^th. At that time, all the carriers will assess whether they want to increase the fee the customer pays and may pass some or all of the increase along. If we are forced to increase our fees the other carriers will also probably follow suit. They just weren’t polite enough to warn folks in advance.

4.)    On July 1^st, if the change is made, then the customers can attempt to cancel service without an etf. The reason reps are so boggled by the concept right now is that no decision has been made on if fees will increase. If they do increase fees, reps will be notified. Customers will also probably be directed to CMO/Loyalty (the toll free number in the notification) instead of front line reps. Arguing with a rep, or an escalations rep/supervisor, is not going to get the customer anywhere. They will need to call that number or request a transfer if they want the etf waived. Again, this is only *IF* the fee increases, which it may not.

5.)    If you call in right now and talk to a rep or supervisor they will probably have no idea what you are talking about. I can tell you with all confidence that notification of the possible change has not been communicated outside of corporate  and cmo/loyalty.

Summary:

As of this morning, there has not been a decision made (at least publicly) on whether or not Verizon will change the Regulatory Charge.  If they decide to increase it starting tomorrow, and leave all other fees exactly where they are (meaning your bill actually increases), then you can get out of your contract without an ETF.  However, if say, they increase the Reg. Charge, but lower a fee somewhere else to keep your bill as-is, it would not count as a material adverse effect and you would not be able to get out of your contract.

Calling regular customer service to cancel your contract will likely not get you anywhere – you will need to call 1-888-684-1888 to talk to someone familiar with the situation.

And again, all of this comes down to an “IF.”  IF Verizon doesn’t end up increasing this charge, then you can just ignore all of this and continue to hang on to that contract of yours.

Update:  We’ve heard from a CSR (customer service rep) that Verizon is distributing materials to coach them on how to deal with customers who are looking to exit their contracts.  They are under the impression that you will not be allowed to leave without an ETF no matter what…guess we’ll see.