Judge approves $50 million settlement from Sprint for phone bill cramming

in iPhone edited July 2015
A U.S. judge has approved a $50 million settlement by Sprint with the Consumer Financial Protection Bureau, part of a still broader settlement over allegations it billed customers for services they never wanted.

In May, Sprint agreed to pay a total of $68 million to settle government complaints about so-called "cramming" practices. That same month however, U.S. District Judge William Pauley in New York asked for further evidence of the deal's fairness before he would sign off on it, according to Reuters.

Separately, Verizon agreed to a $90 million settlement over similar accusations. In 2014 the other two major U.S. carriers -- AT&T and Verizon -- also faced cramming investigations, and settled for $105 million and $90 million respectively.

The $50 million portion of Sprint's payout should go towards refunding money to subscribers, with the remaining $18 million heading to state governments and fines sent to the U.S. Treasury.

Victims of cramming by Sprint and Verizon saw bill entries for unauthorized third-party text messaging services, such as horoscopes. In many cases refunds were denied even though the carriers couldn't prove charges were authorized when confronted by the Federal Communications Commission.

Sprint and Verizon have been barred from offering the offending messaging services, and must not only ask for consent on future third-party charges but clearly label them on monthly statements, and allow them to be blocked. The carriers will also have to submit regular reports to the FCC on refunds and rule compliance.
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