National $158 Million Settlements Reached With Sprint and Verizon
TALLAHASSEE, Fla.—Attorney General Pam Bondi today announced an historic settlement in a global resolution to protect consumers from unwanted and unauthorized charges on their phone bills. Attorney General Bondi joined 49 other Attorneys General, the Consumer Financial Protection Bureau, and the Federal Communications Commission to settle with Sprint Corporation and Cellco Partnership d/b/a Verizon Wireless.
The national settlement includes $158 million in payments to resolve allegations that Sprint and Verizon placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as mobile cramming. Consumers who have been crammed often complain about charges, typically $9.99 per month, for premium text message subscription services (PSMS), such as horoscopes, trivia, and sports scores, which the consumers have never requested.
Sprint and Verizon is the third and fourth mobile telephone provider to enter into a nation-wide settlement to resolve cramming allegations. In late fall of 2014 Attorney General Bondi announced similar settlements with AT&T for $105 million and with T-Mobile in December, for 2014 for $90 million.
Under the terms of the settlements, Sprint will pay $68 million and Verizon will pay $90 million. Of these amounts, Sprint and Verizon are required to provide $50 million and $70 million, respectively, to cramming victims. Sprint and Verizon will each distribute refunds under the supervision of the Consumer Financial Protection Bureau. Sprint will also pay $12 million to the Attorneys General and $6 million to the Federal Communications Commission. Additionally, Verizon will pay $16 million to the Attorneys General and $4 million to the Federal Communications Commission.
The settlements also require Sprint and Verizon to stay out of the commercial PSMS business and undertake a number of steps designed to ensure that consumers are billed only for third-party charges the consumers have authorized. Those steps include the following:
· Carriers must obtain consumers’ express consent before billing them for third-party charges and must ensure that consumers are only charged for services if the consumers have been informed of all material terms and conditions of their payment;
· Carriers must give consumers an opportunity to obtain full refunds or credits when they are billed for unauthorized third-party charges;
· Carriers must inform customers when they sign up for services that their mobile phones can be used to pay for third-party charges and that those third-party charges can be blocked if the consumers do not want to use their phones as the payment method for third-party products; and · Carriers must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from carrier charges, and must include in that same section information about the consumers’ ability to block third-party charges.
Consumers can submit claims under the redress programs by visiting SprintRefundPSMS.com and/or CFPBSettlementVerizon.com . On those websites, consumers can submit claims, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts. Consumers who have questions about the redress programs can visit the program websites or call the settlement administrators at: 877-389-8787 for Sprint, and/or 888-726-7063 for Verizon.