Cramming Costs Verizon and Sprint $158M
Verizon and Sprint are paying a dear price for the mystery charges to their customer’s phone bills. The two cell carriers will cough up a combined $158 million to settle investigations into the unauthorized charges or cramming. With this announcement the Federal Communications Commission has settled cramming charges with all four major wireless carriers. AT&T settled in October for $105 million, and T-Mobile settled in December for $90 million. Of the $158 million, Verizon will pay $90 million and Sprint $68 million.
Most of the money from the settlement will go to setting up refund programs for customers victimized by the practice. The cramming charges came from premium text messaging services like horoscopes or celebrity gossip sent directly to the customers phone and costing about $9.99 per month. Verizon kept 30 percent of the fees, and Sprint pocketed 35 percent. Victims of the practice often didn’t sign up for the services and carriers wouldn’t always offer refunds. When asked for proof that customers had signed up for the service Sprint and Verizon “were unable to prove that these services were ever requested.”
As part of the settlement neither company is permitted to charge consumers for premium text messages. They must also implement systems to ensure they obtain a customer’s informed consent before allowing third-party charges. Both Verizon and Sprint have already begun ending these charges.
In a bizarre statement emailed to The Verge.com Verizon stated “Today’s settlement reflects Verizon’s continued focus on putting customers first.” Verizon claims that it “rigorously protected” customers from these authorized charges. Verizon also says that it had a “broad policy” of allowing refunds on premium text message charges.
Sprint was equally in denial by saying “Sprint was an industry leader in enacting rigorous safeguards to protect customers against unauthorized billing by premium SMS merchants,” The statement went on to say “Sprint always puts its customers’ interests first,” and that it returned “tens of millions of dollars” in refunds long before this investigation began.
Both Verizon’s refund program and Sprint’s refund program are now accepting claims.
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