Dubious Legality
Im not a lawyer, but I'm not entirely sure this is legal because of the Federal Wiretap Act.
Generally there would have to be a Warrant issued to intercept communications between the handset and tower, which is likely how this system works, or there would have to a notorized consent form signed by whoever was subject to monitoring. Woe to the overzealous cop or Federal agent that decided to use this as an evidence collection mechanism though because its very likely inadmissable.
I get the feeling Verizon's legal people didnt have much input on this one.