Verizon Wireless, Sprint To Pay $120M To Consumers For Unauthorized Third-Party Mobile Charges

LOS ANGELES (CBSLA.com) — Verizon Wireless and Sprint will pay a total of $120 million to consumers who were the victims of unauthorized third-party charges on their wireless phone bills, under a settlement with the state of California, Attorney General Kamala Harris announced Tuesday.

The settlement resolves allegations that Verizon Wireless and Sprint placed charges for third-party services on subscribers' mobile phone bills that were not authorized, a practice known as "mobile cramming."

According to the Attorney General's office, consumers who have been "crammed" often have charges, typically $9.99 a month, for "premium" text message subscription services such as horoscopes, trivia and sports scores that the consumers did not request.

"This settlement holds Sprint and Verizon accountable for their actions, ends these bad business practices and refund consumers. I encourage Californians who were victims of Sprint and Verizon's cramming practices to file a claim immediately," Harris said in a statement.

In the $68 million settlement with Sprint, the state of California will receive $549,731.29 and consumers will receive $50 million. In the $90 million settlement with Verizon, the state will receive $733,298.41 and consumers will receive $70 million. The funds earmarked for consumers will be distributed through redress programs under the supervision of the Consumer Financial Protection Bureau, officials from the Attorney General's office said.

The settlement also requires Sprint and Verizon to stay out of the commercial premium text message subscription business and take steps to ensure they only bill consumers for third-party charges that have been authorized, including obtaining consumers' express consent before billing them for third-party charges, giving consumers an opportunity to get a full refund or credit when billed for an unauthorized third-party charge, informing customers when they sign up for services that their mobile phone can be used to pay for third-party charges and clearly distinguishing third-party charges in a dedicated section of mobile phone bills.

Sprint customers who believe they have been "crammed" can submit claims by visiting www.SprintRefundPSMS.com or call (877) 389-8787, while Verizon customers can go to www.CFPBSettlementVerizon.com or call (888) 726-7063.