Verizon Communications will pay New Jersey $795,000 to settle the state's lawsuit alleging the telco used "deceptive and misleading" marketing, sales, billing and customer-service practices related to its FiOS services.
The telco also will provide $50 gift cards to the 1,160 customers who complained to the New Jersey Division of Consumer Affairs to resolve the lawsuit, which was filed in March 2009.
The state charged that Verizon failed to provide advertised promotional gifts -- including flat-screen HDTVs -- when consumers signed up for FiOS service. The lawsuit also alleged that Verizon charged consumers higher prices for service than prices quoted in door-to-door solicitations and ads, and charged activation fees after consumers were told that such would be waived.
Verizon's $795,000 payment to the state includes civil penalties and reimbursement of attorneys' fees and investigative costs. The company made no admissions of liability or wrongdoing in entering into the settlement.
Under the terms of the settlement, announced Monday, the consumers who complained may cancel their FiOS service without an early termination fee. Verizon also has agreed to retain at its own expense a consumer-affairs liaison for one year who will assess the company's compliance with the terms of the settlement and submit quarterly reports to the state.
"Companies must deliver services at the terms advertised and represented to consumers," New Jersey Attorney General Anne Milgram said in a statement. "This settlement demonstrates Verizon's commitment to do right by its customers and to adhere to our consumer protection laws and regulations.
Asked to comment, Verizon manager of media relations Rich Young said that the "vast majority of the issues brought to the state's attention were related to the early deployment of FiOS service in New Jersey -- in some cases, nearly three years ago." He said the complaints represented a very small fraction of the total number of FiOS TV customers in the state.
Verizon has worked with the state to address the complaints, Young said. "This joint settlement avoids a protracted lawsuit and is in the best interest of consumers," he said. "As a result of Verizon's entry into the New Jersey television marketplace, hundreds of thousands of New Jerseyans now benefit from competition and the availability of a superior product."
Verizon offers FiOS TV in 348 municipalities in New Jersey, available to more than 1.9 million homes and businesses in 19 counties. The company claims it now serves more locations than either Comcast and Cablevision Systems in the state.
The telco first launched FiOS TV in New Jersey in December 2006. Verizon said it has started offering its FiOS service to the 60 municipalities with the densest populations and every county seat in the company's service territory in the state, as required in the initial statewide video franchise legislation.