District Consumers Eligible for ‘Cramming’ Refunds under Terms of Settlement with Sprint and Verizon

District Part of 50-State Settlement over Unauthorized Charges; City Will Also Receive Funds

Washington, DC – Consumers in the District will be eligible for refunds under settlements reached with Sprint Corporation and Cellco Partnership d/b/a Verizon Wireless by the District of Columbia, all 50 states, the Federal Communications Commission, and the Consumer Financial Protection Bureau, Attorney General Karl A. Racine announced today. In addition, the District government will receive a $127,247.09 settlement payment from Sprint and a $169,668.24 settlement payment from Verizon.

These national settlements resolve allegations that Sprint and Verizon placed unauthorized charges for third-party services on consumers’ mobile telephone bills, a practice known as “cramming.”

“This is good news for our residents, and is another example of the kind of robust consumer protection that we want to do in the Office of the Attorney General,” Attorney General Racine said. “Settlements like this underscore the fact that our consumer-protection program must be ready and able to take on major corporations as well as fly-by-night operators.”

The settlements with Sprint and Verizon follow similar state-federal settlements with T-Mobile USA, Inc., announced on December 19, 2014; and with AT&T Mobility, LLC, announced on October 8, 2014. Consumers who have been the victims of cramming often complain about charges (typically $9.99 per month) for “premium” text-message-subscription services that the consumers did not want or request. The services include features such as horoscopes, trivia, and sports scores.

Like the earlier settlements with AT&T and T-Mobile, the Sprint and Verizon settlements require the carriers to stay out of the commercial premium text messaging business and to take the following steps:

  • The carriers must obtain consumers’ express consent before billing them for third-party charges, and must ensure that consumers are only charged for services if they have been informed of all material terms and conditions of the services and charges;
  • The carriers must give consumers opportunities to obtain full refunds or credits when they are billed for unauthorized third-party charges;
  • The carriers must inform consumers when they sign up for services that their mobile phones can be used to pay for third-party charges;
  • The carriers must describe for the consumers how they can block third-party charges if they do not want to use their phones to pay such charges; and
  • The carriers must present third-party charges in a dedicated section of a consumer’s mobile phone bill, must clearly distinguish the third-party charges from the carrier’s own charges, and must include, in that same section, information about blocking third-party charges.

Beginning today, consumers who were victims of cramming by Sprint or Verizon can visit www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com. There, consumers can submit refund claims, find information about refund eligibility and how to obtain a refund, and request a free summary of purchases on their accounts.

Consumers who have questions can visit the program websites or call the settlement administrators at: (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon). Sprint and Verizon will each distribute consumer refunds through redress programs supervised by the Consumer Financial Protection Bureau.