It hasn’t been long since we last heard about cramming; a few weeks ago, the deadline passed for customers to request refunds for AT&T’s hidden charges. Today, Verizon and Sprint are being ordered to pay up for similar practices.
On Tuesday, the Consumer Financial Protection Bureau is settling its charges against Verizon and Sprint for cramming with a combined $158 million, of which $120 million will be used to refund subscribers who were subject to the charges. For comparison, AT&T was charged $105 million in total.
The cramming charges system allowed third party services to charge mobile users without their consent to their phone bill. These charges often amounted to $10 a month, and the carriers got 30 percent of each transaction. Customers who asked were denied refunds.
“For too long, consumers have been charged on their phone bills for things they did not buy,” FCC Chairman Tom Wheeler said in a statement. “We call these fraudulent charges ‘cramming,’ and with today’s agreements we are calling them history for Verizon and Sprint customers.”
The wireless providers have agreed to pay their fines, while also improving their billing systems to increase oversight so this doesn’t happen in the future.
Signing up for these unauthorized charges were often as simple as an unsuspecting user entering their phone number into a website. Even where the website would often claim to be offering a free service, a charge could be passed down the line to the user, all via that mobile number.
“Well before any government action, Verizon Wireless stopped allowing companies to place charges for premium text message services on customers’ bills,” spokeswoman Debra Lewis said in a statement.”Customers who believe they were billed improperly for these services may seek a refund.”
Sprint “returned tens of millions of dollars long before the government initiated its investigation of our industry,” the company said in a statement.
Sprint and Verizon have both opted to host their own refund pages (AT&T let the FCC handle the refunds). Verizon customers should visit www.cfpbsettlementverizon.com and Sprint customer should go to www.sprintrefundpsms.com.