FCC, FTC Join in Anti-Cramming Posse


ArrestedWe are running a story about a broadcaster worked up over $40K in fines, but to really run up a bill, you need to be a telco. Verizon and Sprint are paying a combined $158M to settle cramming charges.

The two DC agencies are joined by numerous states attorneys general in the agreements.

Added to other cramming settlements, the enforcers have handed out $353M in cramming penalties that have resulted on $267.5M in restitution going back to wronged consumers.

In the current action, Verizon will pay $90M and Sprint will pay $68M.

“For too long, consumers have been charged on their phone bills for things they did not buy,” said 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.”

“Consumers rightfully expect their monthly phone bills will reflect only those services that they’ve purchased,” said Travis LeBlanc, Chief of the FCC’s Enforcement Bureau.  “Today’s settlements put in place strong protections that will prevent consumers from being victimized by these kinds of practices in the future.”

The FCC detailed exactly what the alleged wrong-doing entailed: “The monthly charge for these third-party premium text messaging services ranged from $0.99 to $14.00, but typically were $9.99 per month.  Verizon retained 30% or more of each third-party charge that it billed, while Sprint received approximately 35% of collected revenues for each of its third-party charges.  Numerous consumers have complained to the FCC, other government agencies, and the carriers that they never requested or authorized the third-party services for which they were charged.  Customers who called to complain were often denied refunds, and yet, when the FCC requested proof that customers had authorized charges, the carriers were unable to prove that these services were ever requested.”