California Verizon customers and shareholders may be aware that, in 2010, the FCC began an investigation into so called “mystery fees” being charged by Verizon to nearly 15 million of its wireless customers. The $1.99 fee on customers’ statements each month between 2007 and 2010 was characterized as a small-data fee. It has been claimed that these fees were not real and should not have been charged to customers. As a result, Verizon was ordered to pay millions in fines and refunds to customers, which subsequently led to the filing of a derivative suit by one of the company’s shareholders.

The shareholder alleges that some of the directors and officers of the company breached their duties as managers by authorizing the charging of the “bogus” fees. He claims that their dereliction of duty resulted in the company paying $25 million to put an end to the investigation and refunding at least $52.8 million to customers. In addition to asking the court for unspecified damages, the shareholder has requested that the court order Verizon to improve its procedures regarding corporate management.

It is hoped that these measures will keep similar situations from occurring in the future. The amount of overcharging during the relevant time period is claimed to have reached $360 million. Verizon declined comment on the litigation.

Public companies such as Verizon have a responsibility to both their customers and shareholders. When a California company and/or its directors and officers breach those responsibilities, shareholders may file a derivative suit against the company in an attempt to hold it accountable. When a company has shareholders, its actions not only affect customers, but those who invest in the company as well.

Source: Bloomberg, Verizon Sued for Mismanagement Over FCC Fine on Charges, Phil Milford, Oct. 24, 2013