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Verizon, Sprint to Pay $158 Million Over Unauthorised Phone Charges

Verizon, Sprint to Pay $158 Million Over Unauthorised Phone Charges

By Reuters | Updated: 13 May 2015 10:08 IST

Verizon Communications Inc will pay $90 million (roughly Rs. 576 crores) and Sprint Corp will pay $68 million to settle US government probes into unauthorised charges tacked onto their customers' phone bills, federal agencies said on Tuesday.

The settlements are the latest in the government's push against the practice known as cramming, in which mobile carriers bill customers for services they never requested such as daily horoscopes or trivia.

The Federal Communications Commission, the Consumer Financial Protection Bureau and attorneys general from across the country investigated the charges and negotiated settlements with Verizon and Sprint, the No. 1 and No. 3 wireless providers.

"Well before any government action, Verizon Wireless stopped allowing companies to place charges for premium text message services on customers' bills," Verizon spokesman Ed McFaddensaid in a statement.

Sprint spokesman Jeff Silva said the company had already refunded customers tens of millions of dollars before the government's investigation.

The companies joined national carriers AT&T Inc and T-Mobile US in agreeing to pay fines and refund consumers for such practices.

Last year, AT&T paid $105 million (roughly Rs. 673 crores0 and T-Mobile paid $90 million to settle a similar probe by the FCC, theFederal Trade Commission and state attorneys general.

The regulators said on Tuesday that the companies had charged consumers for subscriptions to third-party products such as daily humor or celebrity gossip services, typically charging consumers $9.99 a month and taking a cut of up to 40 percent.

Consumers who called to complain were often refused a refund, the FCC said, even though government investigators could not find proof the services had been requested.

© Thomson Reuters 2015

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