Verizon Backs Down on Bill-Pay Fee after Backlash

Leading U.S. wireless carrier Verizon Wireless backed down Friday on instituting a $2 charge for people paying their bills by credit card after a sweeping popular backlash over the plan.

The reversal just one day after announcing the fee came also after the industry regulator, the Federal Communications Commission, told The New York Times it would investigate the matter "on behalf of American consumers."

Verizon had said the new fee was "designed to address costs incurred by us" for customers who do not pay their bills via paper or electronic checks, or AutoPay, or online banking transfers.

Many customers appeared unsatisfied with those options, however, judging by an outpouring of complaints on Twitter and online petitions, and sweeping criticism in the media.

Finally late Friday the company, which holds roughly a 31 percent share of the cellphone service market, gave in to the backlash.

"Verizon Wireless has decided it will not institute the fee for online or telephone single payments that was announced earlier this week," the company said in a statement.

"The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions."

Chief executive Dan Mead said the company decided that it would just encourage customers to pay by other means "eliminating the need to institute the fee at this time."

The move came as businesses increasingly battle the fees, often two percent, that banks and other issuers charge on consumer purchases made with their credit and debit cards.

Verizon customers were also angered because the company, like its competitors, adds a list of various extra "mandatory" service fees to its bills each month.

Moreover, the company's high-speed 4G LTE data service crashed twice this month, leaving smartphone users without Internet access for several hours.

The controversy was widely compared to the wave of complaints that followed Bank of America's announcement of a $5 monthly fee for U.S. debit card users.

The bank instituted the charge to compensate for lost income after the government issued new regulations to limit debit card interchange fees charged to merchants.

The backlash eventually led the bank to scrap plans for the new fee.