View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
  2. Networks
May 13, 2015

Verizon, Sprint to pay $158m to settle cramming allegations

The companies will also pay $38m in federal and state fines.

By CBR Staff Writer

Verizon Wireless and Sprint will pay a combined $158m to settle US government cramming allegations.

The Federal Communications Commission (FCC), the Consumer Financial Protection Bureau and attorneys general from across the US investigated the charges and negotiated settlements with the companies.

Verizon and Sprint will pay $90m and $68m, respectively, on charges that they operated billing systems that enabled third parties to cram unauthorised charges on customers’ mobile-phone accounts and ignored complaints about the charges.

The companies will also pay $38m in federal and state fines for unauthorised charges on customers’ mobile bills.

Of its settlement, Verizon will have to pay a minimum of $70m to fund a consumer redress programme, $16m in fines to state governments participating in the settlement and a $4m fine to the US Treasury.

Sprint is required to pay a minimum of $50m in payments to consumers, $12m in fines to state governments and a $6m fine to the US Treasury.

FCC chairman Tom Wheeler said: "For too long, consumers have been charged on their phone bills for things they did not buy.

Content from our partners
The growing cybersecurity threats facing retailers
How to integrate security into IT operations
How Kodak evolved to tackle seismic changes in the print industry and embrace digital revolution

"We call these fraudulent charges ‘cramming,’ and with today’s agreements we are calling them history for Verizon and Sprint customers."

A Verizon spokesperson said the company had stopped allowing firms to place charges for premium text message services on customers’ bills well before any government action.

A Sprint spokesman said the company had already returned tens of millions of dollars prior to the government’s probe.

Websites in our network
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED
THANK YOU