Pursuant to consent decrees announced on Tuesday by the FCC and the Consumer Financial Protection Bureau (CFPB), Verizon Wireless and Sprint have agreed to submit a combined voluntary payment of $158 million to the U.S. Treasury to settle charges of mobile “cramming,” through which both carriers were alleged to have billed subscribers hundreds of millions of dollars in unauthorized third-party charges for premium text messaging services.
The settlements follow on similar agreements, signed late last year, in which AT&T and T-Mobile US terminated mobile cramming probes with voluntary payments to the government of $105 million and $90 million, respectively. With the agreements announced this week, all four national wireless carriers have committed total fines of $353 million to the U.S. government to settle complaints of cramming associated with celebrity gossip, horoscope, and similar third-party text services. In remarks to reporters, FCC Chairman Tom Wheeler noted that the four combined settlements cover 98.5% of the U.S. wireless market.
Consisting of $90 million from Verizon and $68 million from Sprint, the payments provide at least $120 million in refunds to affected customers. Among other things, both carriers have also pledged to (1) refrain from adding third-party charges for premium text message services to subscriber bills, (2) obtain subscriber consent before adding any third-party charge to a bill, and (3) clearly and conspicuously identify third-party charges on subscriber bills. Neither carrier acknowledged or denied wrongdoing in signing the consent decree. As a Sprint official observed that the settlement “allows Sprint to continue its focus on enhancing the customer experience,” a Verizon spokesman declared that the agreement “reflects Verizon’s continued focus on putting customers first.”