The FCC announced on Tuesday that Verizon and Sprint have agreed to pay $158 million to settle their bill cramming investigations with the Commission. Verizon Wireless will pay $90 million and Sprint Corporation will pay $68 million, and much of that will go to consumer refunds.
“For too long, consumers have been charged on their phone bills for things they did not buy,” said the oft-outspoken FCC Chairman Tom Wheeler. “We call these fraudulent charges ‘cramming,’ and with today’s agreements we are calling them history for Verizon and Sprint customers.”
In addition to money, the FCC also secured various consumer protections in the settlement, in hopes of preventing future fraudulent charges. The carriers can no longer offer third-party premium SMS charges, they must provide a way to block them, and must regularly report to the FCC.
- no longer offer commercial third-party PSMS charges
- obtain informed consent from customers prior to allowing third-party charges
- clearly and conspicuously identify third-party charges on bills
- offer a free service for customers to block all third-party charges
- regularly report to the FCC on compliance and refunds to customers
Premium Short Messaging Services are setup to send you gimmicky texts like ‘Daily horoscopes.’ Most of them are very easy to opt into, difficult to cancel, and cost ~$10 per month. Last fall, the FCC reached similar deals with AT&T and T-Mobile, who paid $105M and $90M respectively.