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Verizon caves to public pressure and dumps $2 fee

Power to the people! Verizon today says it will dump plans to charge $2 for paying bills online amid a public outcry and threats of an FCC investigation.

Well, that was fast. Verizon Wireless caved to pressure from outraged consumers and a possible probe by the Federal Communications Commission and backed off of a plan to charge customers a $2 fee to pay their wireless bills online.

In a statement issued this afternoon, the company said it would drop the plan announced yesterday.

"At Verizon, we take great care to listen to our customers," Dan Mead, president and chief executive officer of Verizon Wireless said in a statement. "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."

Verizon said that it still wants to encourage customers to take advantage of other payment methods, including automatic payments that charge credit cards or debit bank accounts every month as well as electronic check payments.

Verizon yesterday confirmed reports that beginning January 15, it planned to charge customers $2 to pay their bills online using the one-time Web payment option on its Web site and in its mobile app. The company said the fee would not apply to customers who sign up for automatic bill payment using their credit cards, nor would it apply to customers who pay via electronic or physical checks.

At the time, Verizon didn't offer much of an explanation for why it would need to charge this fee. In a statement sent to CNET early today, Verizon said that "the fee will help allow us to continue to support these single bill payment options in these channels and is designed to address costs incurred by us for only those customers who choose to make single bill payments in alternate payment channels (online, mobile, telephone)."

Even after Verizon retracted the fee, it still didn't offer much of an explanation. The company said in its statement that it had initially made the decision to institute the fee based on "response to customer feedback about the plan, which was designed to improve the efficiency of those transactions."

In other words, Verizon is being charged to clear payments via phone or online and it's passing those fees onto customers.

News of the new charge outraged Verizon Wireless customers throughout the country, many of whom feel they pay enough already for Verizon's service. Customers on the social-networking site Twitter accused the company of being greedy and some even said that they'd leave the company out of principle.

mpagey mpagey

@VerizonSupport @VZWnews $2.00 "convenience" fee for paying online?? No thanks, Verizon. Adios. I am switching to a different phone company.

The public outcry drew the attention of the Federal Communications Commission, which has regulatory authority over the wireless licenses that Verizon uses to offer its service. On Friday the agency issued a statement saying that it would look into the new $2 "convenience fee."

"On behalf of American consumers, we're concerned about Verizon's actions and are looking into the matter," the FCC said in its statement.

The FCC hadn't yet taken any official action to investigate Verizon, but within hours of the statement, Verizon abandoned its "convenience charge" plans, citing input from customers.

It seems pressure from the FCC, coupled with the mounting outcry from consumers was just enough to make Verizon back down. A similar thing happened to Bank of America earlier this year. The company had planned to charge customers $5 fee to use their debit cards to buy things. After outraged customers voiced their opinions loudly online, the company backtracked.

Still, other companies charge fees for processing online transactions. For example, the loan company Sallie Mae charges a fee for customers to pay their bill online. And several power utilities throughout the country also charge fees for processing online transactions.

For Verizon, the outcry comes at a time when the company has been experiencing frequent outages on its 4G LTE wireless network. Three times in the past month, the company has experienced nationwide outages of the 4G LTE data network.

What's more Verizon is also one of the most expensive wireless service providers in the country, so the added fee to customers who already pay more for their wireless service than subscribers for other wireless carriers, almost seems offensive to some wireless customers.

"If you stop and think about it, it's absurd that you have to pay ANYTHING to settle your account with a provider of anything," said real_kieron, a CNET reader who posted a comment following the news of Verizon's new fee. "I mean, really? I pay for the 'service,'...I get an invoice monthly for the 'service,' then I have to pay the provider to zero my account balance...really, it's ludicrous, absurd, totally whacked out, etc."

Updated 1 p.m. PT: This story was updated with additional background information.