Verizon And Sprint To Pay $158 Million To Settle Mobile Cramming Case
by Jim Puzzanghera, Los Angeles Times
Verizon Communications Inc. and Sprint Corp. have agreed to pay a combined $158 million, including at least $120 million in consumer refunds, to settle federal and state investigations into allegations mobile customers were improperly billed for premium text messages.
The so-called cramming of unauthorized charges onto customers’ bills involved one-time fees of 99 cents to $4.99 for third-party text-messaging services and monthly subscriptions to those messages that cost $9.99 to $14 a month, federal regulators said Tuesday.
Customers complained that they never authorized the charges, according to the Federal Communications Commission.
The FCC said Verizon kept at least 30% of the fees charged by the third-party services. Sprint received about 35% of such fees paid by its customers, the FCC said.
The agency was joined by the Consumer Financial Protection Bureau and the attorneys general of all 50 states and the District of Columbia in negotiating the settlements.
“Sprint and Verizon had flawed billing systems that allowed merchants to add unauthorized charges to wireless customer bills,” said Richard Cordray, the bureau’s director.
“Consumers bore the brunt of those charges and ended up paying millions of dollars while the companies reaped profits,” he said.
The companies are the latest wireless carriers to agree to major settlements of federal and state cramming allegations.
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