Sprint, Verizon will pay $158 million to settle complaints about bill cramming

Posted:
in iPhone edited May 2015
U.S. carriers Sprint and Verizon will together spend $158 million to settle government complaints that they let third-party firms bill subscribers millions in unauthorized charges, a practice known as "cramming," the Federal Communications Commission announced on Tuesday.




Verizon will pay out the bulk of the cash, $90 million, while Sprint will owe $68 million. Most of the money should go toward refunding money to subscribers -- $70 million in the case of Verizon, and $50 million from Sprint. The remaining cash will go to state governments, and fines sent to the U.S. Treasury.

Cramming victims saw bill entries for "unauthorized third-party premium text messaging services," the FCC said, yet were frequently denied refunds, even though neither carrier could prove that the charges were authorized when the FCC asked.

These services would cost anywhere between 99 cents and $14 and month, though a typical amount was $10. Verizon was said to have claimed 30 percent from each charge, while Sprint took in 35 percent.

As further conditions of the settlement, Sprint and Verizon can no longer offer the offending third-party services, and must obtain constent for any future third-party charges, also clearly labeling them on bills. Customers must be able to block such charges, and the carriers will have to regularly report back to the FCC on refunds and rule compliance.

Last year, AT&T and T-Mobile were also ordered to pay cramming-related penalties. The former was required to pay $105 million, and the latter $90 million.

Comments

  • Reply 1 of 19
    macmanfelixmacmanfelix Posts: 125member
    Thanks Uncle Sam! The Telecoms have robbed us each for hundreds--if not thousands--of dollars a year every year since Edison died. I can't wait to receive my share of the $158 million you won back for us after allowing them to become and remain anti-competive monopolists---well, after you pay yourselves and your lawyers/friends/campaign contributers. The $1.08 you left for me will really make a difference!
  • Reply 2 of 19
    Sprint should really include that in their television commercials, "We'll cut your bill in half! Now, including cramming!"
  • Reply 3 of 19
    inklinginkling Posts: 731member
    Fines like these have been going on for years and obviously aren't effective. Prison time for some cell-company top executives would send a more powerful message.
  • Reply 4 of 19
    joshajosha Posts: 901member

    The bloody thieves.  :mad:

    Yes a very light penalty, they deserve to pay much more for dipping into customers pockets. 

    :mad:
  • Reply 5 of 19
    robmrobm Posts: 1,068member
    Unbelievable - yea some prison time ought to be dished out for this.
    Unauthorised third party services - how does that work ?

    Wtf does a premium txt message look like anyway ? lol
  • Reply 6 of 19
    maestro64maestro64 Posts: 4,454member
    I'm curious what these cramming charges are I've never seen them on my AT&T bill. I check my bill all the time Ann's never seen them. Who is getting them. I know CD use to charge for everything that is why I never would use them. They just nickel and dime you to death.
  • Reply 7 of 19
    joe28753joe28753 Posts: 75member
    Quote:
    Originally Posted by Maestro64 View Post



    I'm curious what these cramming charges are I've never seen them on my AT&T bill. I check my bill all the time Ann's never seen them. Who is getting them. I know CD use to charge for everything that is why I never would use them. They just nickel and dime you to death.

     

    It's for 3rd party things like "text 12345 and get a daily [joke/horoscope/whatever]!" and you can't un-sign up, and they aren't up front about the fact that they cost money.

  • Reply 8 of 19
    tenlytenly Posts: 707member
    Somewhat off topic - but I think that these providers are getting off easy. I think they should be heavily penalized and have to pay damages to the affected customers - not just refunds. Anything less will do nothing to discourage future practices which are equally corrupt.

    In my opinion, telecommunications companies are among the most corrupt on the planet. They are followed closely by the airlines - and yes - this is a generalization - and I acknowledge that there may be the rare company within these industries that is not corrupt - but if they exist - I haven't come across them!

    I once paid $1000 for an early smartphone overseas. The phone was one of the first to include hardware GPS. When I brought it home and activated it on a local carrier, the carrier sent down an update that disabled my GPS via a registry key in Windows mobile. When I discovered what had happened and contacted the Telecommunications company about it - they said that it would cost me $10 PER MONTH to have them restore the functionality of the hardware GPS chip in the phone that I had purchased outright! It didn't use data services, it wasn't A-GPS which uses cell towers to triangulate position. The mobile phone company provided no value-add directly or indirectly yet they charged people $10/month to use a piece of hardware that had already been paid for outright. To illustrate how ridiculous/criminal this is with another example - it would be almost the exact same situation as if you bought a new faucet set for your kitchen sink and the ELECTRIC company wanted to charge you an extra $10/month to let you use the spray attachment that came with your new sink. Another good example would be if your mobile provider wanted to charge you extra to utilize the Touch-ID feature on an iPhone that you paid full price for. Exorbitant roaming fees and the price they charge for data when travelling is ridiculous to start with - and the fact that most providers won't let you block those features from an account level - lets them prey on those users who don't know better and don't realize the cost of the features or that there is a way to disable them from their phone.

    Airlines that "reprice" your entire ticket when you need to make a change to one segment are equally bad. I once had a flight scheduled and paid for that would take me from Hamburg to Munich to Toronto. When my business in Hamburg finished early, I thought of taking the train to Munich and sightsee a bit and then board my flight there - so i called the airline to say I wouldn't need the segment from Hamburg to Munich and they could go ahead and resell my seat. LOL! Even though I was keeping the same date, flight and seat on the Munich to Toronto segment, the airline wants to charge me $3,000 just to GIVE THEM BACK one segment!!!! If that's not corrupt - I don't know what is.

    (End rant. We now return you to a hopefully useful discussion.)
  • Reply 9 of 19
    Cramming? Stealing.
  • Reply 10 of 19
    kpluckkpluck Posts: 500member
    Quote:

    Originally Posted by Maestro64 View Post



    Who is getting them.

    Idiots are getting them. Basically they get a text from someone/something they don't know and instead of ignoring like a reasonable person would they text back which starts the charges. The companies involved count on peoples stupidity to make money and it works often enough to make it profitable.

     

    -kpluck

  • Reply 11 of 19
    eric44eric44 Posts: 6member
    robm wrote: »
    Unbelievable - yea some prison time ought to be dished out for this.
    Unauthorised third party services - how does that work ?

    Wtf does a premium txt message look like anyway ? lol
  • Reply 12 of 19
    eric44eric44 Posts: 6member
    robm wrote: »
    Unbelievable - yea some prison time ought to be dished out for this.
    Unauthorised third party services - how does that work ?

    Wtf does a premium txt message look like anyway ? lol


    I think a premium one is like getting a message from a short code number like 555-123 and it's an ad saying that they'll provide you a service of some sort then they charge you a monthly charge on your wireless bill. It's from a third party and its an extra charge from your text. Look at Verizon premium text messaging on Google
  • Reply 13 of 19
    jbdragonjbdragon Posts: 1,996member
    Quote:

    Originally Posted by MacManFelix View Post



    Thanks Uncle Sam! The Telecoms have robbed us each for hundreds--if not thousands--of dollars a year every year since Edison died. I can't wait to receive my share of the $158 million you won back for us after allowing them to become and remain anti-competive monopolists---well, after you pay yourselves and your lawyers/friends/campaign contributers. The $1.08 you left for me will really make a difference!

     

    You expect that much back?  Consider yourself lucky.  I don't think you'll see a penny of that money.

  • Reply 14 of 19
    bugsnwbugsnw Posts: 712member

    Phone bills are notoriously complex and it'd be easy to hide charges in there. This whole debacle doesn't surprise me.

     

    So they get fined $160 million and the customer gets $.03 cents. The lawyers always run up those bills just enough that I get my 3 cents. They're good. Hmm........

  • Reply 15 of 19
    icoco3icoco3 Posts: 1,457member
    Quote:

    Originally Posted by bugsnw View Post

     

    Phone bills are notoriously complex and it'd be easy to hide charges in there. This whole debacle doesn't surprise me.

     

    So they get fined $160 million and the customer gets $.03 cents. The lawyers always run up those bills just enough that I get my 3 cents. They're good. Hmm........


     

    And that comment was 2 cents of your 3... <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 16 of 19
    geekmeegeekmee Posts: 299member
    Isn't this theft by conversion?... Why isn't there jail time??
  • Reply 17 of 19
    mnbob1mnbob1 Posts: 262member
    Quote:

    Originally Posted by kpluck View Post

     

    Idiots are getting them. Basically they get a text from someone/something they don't know and instead of ignoring like a reasonable person would they text back which starts the charges. The companies involved count on peoples stupidity to make money and it works often enough to make it profitable.

     

    -kpluck




    I'm an AT&T customer. I was getting these on a daily basis. The text included a prompt to text "END" or "STOP" to prevent getting any further messages. Unfortunately any response including those was considered an agreement to start. I don't consider myself an idiot just trying to avoid these annoying messages. I always scrutinize my bill and started to see the charges. Calling AT&T customer service always removed the charges. They finally came out with a service that allowed me to block these 3rd parties from adding to my billing. Customer service always took care of the problem with no questions asked.

  • Reply 18 of 19
    .......and I acknowledge that there may be the rare company within these industries that is not corrupt - but if they exist - I haven't come across them!



    There is a mobile company in the U.S. you may want to take a look at. Email me [email protected]
  • Reply 19 of 19
    bigmikebigmike Posts: 250member
    Keep the Apple news coming...
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