RICHMOND, Va. (WRIC) — Virginia Attorney General Mark Herring issued a reminder to consumers Wednesday about a deadline to file for compensation in a $158 million settlement with Sprint and Verizon announced in May. Earlier this year, Herring announced that he, along with the attorneys general of the other 49 States and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission, reached settlements with Sprint and Verizon Wireless that included $158 million in payments to resolve allegations that Sprint and Verizon placed unauthorized, third-party charges on consumers’ mobile telephone bills, a practice known as “mobile cramming.”
Consumers who have been “crammed” often had charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores that the consumers have never heard of or requested. Sprint and Verizon are the third and fourth mobile telephone providers to enter into nationwide settlements to resolve allegations regarding cramming. Herring announced similar settlements with AT&T in October of 2014 ($105 million). All four mobile carriers announced they would cease billing customers for commercial PSMS in the fall of 2013.
“Our consumer protection team is working each and every day on behalf of Virginians, but it’s important that folks know that they’re here to help, and know about important deadlines, prevalent scams, and consumer issues,” said Attorney General Herring. “These settlements provide much needed relief for victims of cramming practices, and I’m pleased to fight against these deceptive tactics in conjunction with our state and federal partners.”
Under the terms of the settlements, Sprint paid $68 million, and Verizon paid $90 million. Of these amounts, Sprint provided $50 million and Verizon provided $70 million directly to consumers who were victims of cramming. Sprint and Verizon each distributed refunds to harmed consumers through redress programs that will be supervised by the Consumer Financial Protection Bureau.
Consumers can submit claims under the redress programs by visiting http://www.SprintRefundPSMS.com. Consumers who have questions about the redress programs can visit the program websites or call the settlement administrators at: (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon).
The settlements, like those entered into by AT&T and T-Mobile in late 2014, require Sprint and Verizon to stay out of the commercial PSMS business-the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem. Under each of the four settlements, the carriers, including Sprint and Verizon, must also take a number of steps designed to ensure that they only bill consumers for third-party charges that have been authorized, including the following:
- The carriers must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumers have been informed of all material terms and conditions of their payment;
- The carriers must give consumers an opportunity to obtain a full refund or credit when they are billed for unauthorized, third-party charges;
- The carriers must inform their customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of how those third-party charges can be blocked if the consumers do not want to use their phone to pay for third-party products; and
- The carriers must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from the carrier’s own charges, and must include in that same section information about the consumers’ ability to block third-party charges.
As reimbursement for attorneys’ fees and costs, Sprint paid $12 million to the state attorneys general and $6 million to the Federal Communications Commission. Verizon paid $16 million to the attorneys general and $4 million to the Federal Communications Commission. Virginia’s share of the state payments is $212,604.25 from Sprint, and $283,542.02