Sprint Corp. and Verizon Wireless have agreed to a $158 million nationwide settlement to resolve allegations that they put unauthorized third-party charges on customers’ mobile phone bills – a process called “cramming.”
State Attorney General Eric T. Schneiderman announced multistate settlements with the two companies Tuesday. An estimated 2 million New York State residents will be eligible for refunds.
Schneiderman said one common “cramming” charge is a $9.99 per month premium text messaging subscription service, also known as PSMS, for horoscopes, trivia, sports scores or other information that consumers often never requested.
“It’s both unfair and illegal to charge consumers for services they did not request, a practice that Sprint and Verizon engaged in over several years,” Schneiderman said in a statement.
Verizon will pay $90 million under the settlement. Of that amount, $70 million will go to victims of cramming, $16 million will go to state attorneys general and $4 million to the Federal Communications Commission. New York State will get about $1.9 million of the share going to state attorneys general.
Sprint will pay $68 million under the settlement. Of that total, $50 million will go to victims of cramming, $12 million to state attorneys general, and $6 million to the FCC. New York State will get about $340,000 of the share going to state attorneys general.
The settlement also bars Sprint and Verizon from the PSMS business, and requires them to receive customers’ express consent before billing consumers for third-party charges, among other terms.
Schneiderman partnered on the case with 49 other state attorneys general, the District of Columbia, the Consumer Financial Protection Bureau and the FCC.
Consumers can submit claims through sprintrefundpsms.com and cfpbsettlementverizon.com. Consumers with questions about the redress programs can call 1-877-389-878 for the Sprint case, or 1-888-726-7063 for Verizon.
Similar national settlements over cramming were reached last year with AT&T and T-Mobile.