Verizon, Sprint to pay $158 mn to settle investigations into cramming charges
13 May 2015
Verizon and Sprint will pay $158 million between them to settle investigations into unauthorised charges placed on their customers' phone bills, known as "cramming."
With today's announcement, the Federal Communications Commission had now made cramming settlements with all four major wireless carriers after AT&T settled in October for $105 million, and T-Mobile settled in December for $90 million. The $158 million would be split with $90 million coming from Verizon and $68 million from Sprint.
The bulk of the money would go toward setting up refund programmes to return money to consumers who were hit with unauthorised charges.
The charges came from premium text messaging services, which might send information like horoscopes or celebrity gossip, and usually running about $9.99 per month.
The problem was, consumers quite often did not sign up for the services, and carriers would not always offer refunds.
According to the FCC, when it asked carriers for evidence that their customers signed up for premium texting services, they "were unable to prove that these services were ever requested."
Verizon and Sprint would now, no longer be allowed to charge consumers for premium text messages.
Verizon and Sprint had partnered with third-party vendors that sold premium text messaging services, such as daily horoscopes, trivia and sports scores.
According to regulators, they launched an investigation after receipt of numerous complaints that the carriers had refused to refund the charges.
In statements sent to reporters both companies claimed they had stopped allowing premium text messaging before the government investigation got under way.
According to Sprint spokesman Jeffrey Silva, the company had already returned ''tens of millions of dollars'' to its customers.
''This settlement gives our customers who believe they were wrongfully billed for (premium text messaging) services the ability to get a refund, and allows Sprint to continue to focus on enhancing the customer experience,'' Silva wrote.
According to Verizon Wireless spokeswoman Debra Lewis, the settlement ''reflects Verizon's continued focus on putting customers first.'' She said, the company had ''rigorously protected'' its customers from unauthorised charges.
''Verizon thoroughly vetted the companies that provided these services and terminated providers who did not comply with our industry-leading practices,'' Lewis wrote.
