INDIANAPOLIS (May 12, 2015) – The state resolved “cramming” cases against two major mobile phone carriers as part of a multi-state settlement with Sprint and Verizon.
The mobile carriers were accused of putting unauthorized charges on customers’ cell phone bills. The state announced a similar settlement last year with AT&T and T-Mobile. As a result of the latest settlement, an estimated 750,000 Hoosiers may be eligible for refunds.
Indiana is joined by the attorneys general of the other 49 states and the District of Columbia, the Consumer Financial Protection Bureau and the Federal Communications Commission (FCC).
According to Indiana Attorney General Greg Zoeller, mobile customers who fell victim to “cramming” end up with charges, often $9.99 a month, for “premium” text message subscriptions (PSMS subscriptions) for horoscopes, trivia and sports scores that customers didn’t know about or request. All four mobile carriers said they’d stop billing for these services in fall 2013.
Under the terms of the settlement, Sprint will pay $68 million and Verizon will pay $90 million. Of that money, $50 million from Sprint and $70 million from Verizon will go to customers who found the unauthorized charges on their bills. The rest of the money will go to states and the FCC.
Customers who believe they were “crammed” can submit claims to the following websites: www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com. There, they can submit claims, find information about eligibility and how to get a refund and get an account summary of PSMS purchases.
Two phone numbers have been set up to handle calls about the settlement: (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon).
The settlement requires Sprint and Verizon to stay out of the commercial PSMS business—a provision also mandated in the 2014 case involving AT&T and T-Mobile. Carriers must also take steps to make sure they bill customers for authorized charges, including:
- 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
- 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.
The state of Indiana received $451,937.81 for its participation in the Sprint and Verizon settlements ($193,663.88 from Sprint, $258,273.93 from Verizon). Zoeller said the money will go to the Consumer Protection Fund.