Sprint, Verizon to pay $158 million for mobile cramming, Attorney General Cooper announces
Release date: 5/12/2015
Cell phone providers to repay customers for unauthorized charges on bills
Raleigh: Sprint Corporation and Verizon Wireless will pay a combined $158 million for unauthorized charges on consumers’ cell phone bills, Attorney General Roy Cooper announced today.
“Consumers who got hit with extra charges they didn’t agree to now have a chance to get their money back,” Cooper said. “Cell phone carriers must be held accountable and should give customers accurate information that shows them exactly what they owe each month.”
Cooper, the attorneys general for 49 other states and the District of Columbia, the Consumer Financial Protection Bureau (CFBP) and the Federal Communications Commission (FCC), have reached a settlement with Sprint and Verizon over allegations of mobile cramming, the practice of placing unauthorized charges for third-party services on consumers’ cell phone bills.
Under today’s settlements, Sprint will pay $68 million and Verizon Wireless will pay $90 million, including a combined total of $537,689.72 directly to the State of North Carolina. Of those national totals, Sprint will pay $50 million and Verizon $70 million in refunds to consumers across the country who were victims of cramming. Approximately 733,200 North Carolina Verizon consumers are expected to be eligible for money back under that settlement. The Sprint settlement could result in refunds for as many as 397,800 North Carolina consumers.
Cramming on mobile phone bills typically involves a $9.99 per month fee for premium text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores. Usually, consumers unknowingly sign up for these services via websites, for example when they provided their phone number to receive survey results or enter a contest. In many cases, consumers were not told they were signing up for subscription services that could cost them money.
Beginning today, consumers can submit claims under the Sprint and Verizon cramming refund program by visiting www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com. Sprint and Verizon customers should be notified by the respective company if they are eligible for money back. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the Claims Administrator at (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon) for more information.
Sprint and Verizon are the third and fourth mobile telephone providers to enter into nationwide settlements to resolve cramming allegations. AT&T reached a settlement worth $105 million in October 2014 and T-Mobile agreed to a $90 million settlement in December 2014. More than 2 million North Carolina consumers could see money back under the settlements. All four major mobile carriers announced in the fall of 2013 that they would cease billing their customers for commercial PSMS charges.
Similar to the settlements with AT&T and T-Mobile, Sprint and Verizon are required to stay out of the commercial PSMS business, which law enforcement agencies point to as the main cause of mobile cramming. In addition, Sprint and Verizon must take a number of steps designed to make sure that they only bill consumers for authorized third-party charges, including:
Getting consumers’ express consent before billing them for third-party charges, and ensuring that consumers are only charged for services if they’ve been informed of terms and conditions;
Providing a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
Informing its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and how those charges can be blocked if the consumer doesn’t want to use their phone as a payment method; and
Listing third-party charges in a dedicated section of consumers’ mobile phone bills, clearly distinguished from the carriers’ charges, and include in that same section information about how to block the charges.
“Review your cell phone bill carefully each month to catch any mistakes or unauthorized charges,” cautioned Cooper. “If you notice any charges that you didn’t agree to, notify your mobile phone carrier immediately. If you need help resolving any issues, file a complaint with our office.
North Carolina consumers can file a complaint with Attorney General’s Consumer Protection Division by completing a complaint form at ncdoj.gov
or calling 1-877-5-NO-SCAM toll-free within state.
Media Contact: Noelle Talley, (919)716-6484