Sprint and Verizon have agreed to pay a whopping $US158 million for charging customers unauthorised third-party fees.
Known as “cramming,” this practice has been long-investigated by the FCC. One of the most common examples of cramming is when carriers charge for ‘premium texting services’ that the customer never originally requested. These subscriptions usually cost around $US10 a month, and provide superfluous text services like horoscopes, trivia, and sports news.
Mobile customers, often unaware they were being charged, would then be required to opt out of the third-party service in order to stop the charges from being applied to their monthly bill.
Under the terms of this settlement, Sprint will pay $US68 million and Verizon will shell out $US90 million.
According to a press release from New York State Attorney General Eric Schneiderman’s office, following this settlement, millions of Verizon and Sprint customers are now eligible for refunds.
“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,” said the Attorney General in a statement.
Sprint and Verizon are the latest major mobile carriers to agree to such a settlement. Last year AT&T agreed to pay $US105 million and T-Mobile $US90 million. With Verizon and Sprint added to the mix, national cramming settlements now top $US353 million.
Business Insider reached out to both Verizon and Sprint for comment and will update the post if we hear back.
Under these settlements, each mobile carrier has agreed to stop offering commercial premium texting services programs. Additionally, they must now go out of their way to make sure consumers are expressly consenting to any third-party services that will appear on their bill. Any third-party charges must also have their own dedicated section in the phone bill.
Both state governments and the FCC have been actively trying to stop cramming. Given that all four major carriers have agreed halt the controversial practice, this news may be the final nail in the cramming coffin.