Verizon Inflated Subscriber Numbers, Suit Alleges
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The telecommunications giant Verizon Communications inflated its advertising prices for its fiberoptic cable service by overstating the number of subscribers to the service by 33% percent in its second quarter, according to a class action suit filed in U.S. District Court in Manhattan yesterday.
Documents obtained by a digital marketing firm that filed the suit, Digital Art Services, show that Verizon reported the number of prospective subscribers plus its active subscribers as its actual subscriber figures for the FiOS service, as it is known, in order to increase its advertising rates, the suit alleges. Digital Art Services projects the advertisers involved in the class action purchased more than $5 million in advertising with the FiOS service, according to the suit. When the firm called a meeting this summer with a Verizon sales agent to complain about the poor response to its FiOS advertising, it discovered documents that separated the reported subscribers into “active” and “pending” customers in the New York region, according to the suit. At the time, Verizon said it included pending customers because they typically became active customers within two weeks, the complaint says, but the marketing firm says it takes as long as 10 months, from what it saw in the papers.