State Joins $158 Million National Settlements with Verizon and Sprint Over Data Cramming Allegations
National Cramming Settlements Now Total $353 Million
For immediate release Tuesday, May 12, 2015
Attorney General George Jepsen and state Department of Consumer Protection (DCP) Commissioner Jonathan A. Harris announced today that Connecticut, along with all 49 other states and the District of Columbia, have reached settlements with Sprint Corporation and Verizon Wireless to resolve allegations that the companies participated in a practice known as "data cramming."
The states, with the Consumer Financial Protection Bureau and Federal Communication Commissions (FCC), alleged that Sprint and Verizon placed charges on consumers' mobile telephone bills without their knowledge or consent. The $158 million global settlements provide refunds for affected consumers and monetary payments to participating states and federal agencies. In addition to refunds, the settlements prohibit the mobile carriers from engaging in this activity in the future without consumers' consent.
The states alleged that Sprint and Verizon billed consumers for premium text message subscription services (PSMS) that they had not signed up for or otherwise agreed to receive. These charges, typically $9.99 per month, were added to consumers' monthly bills for services provided by a third-party, such as daily horoscope readings, trivia and sports updates.
“I am glad that Verizon and Sprint have decided to join AT&T and T-Mobile in discontinuing this deceitful practice that has unknowingly cost consumers for too long,” said Attorney General Jepsen. “I take allegations of data cramming very seriously. I am encouraged that consumers will get relief for unwarranted charges and see real reform take place in the manner in which consumers are billed in the future.”
“This settlement is good for consumers who will get refunds," Harris said. "It’s also good for the marketplace since it sends a message that fraud will not be tolerated, helping to level the playing field so businesses that play by the rules, as most do, are not disadvantaged.”
The $158 million settlement includes a $12 million from Sprint and a $16 million payment from Verizon to be shared among participating states. Connecticut's share of the Sprint payment will be$160,314.28, and its payment from Verizon will be $213,782.71 from Verizon under the settlements. Sprint will also make a $6 million payment to the FCC while Verizon will pay $4 million. Sprint and Verizon will pay up to $50 million and $70 million, respectively, to consumers who were victimized by cramming through claims programs supervised by the Consumer Financial Protection Bureau. Another provision in the settlement requires Sprint and Verizon to bill for third-party charges only if such charges have been authorized by consumers, improve the manner in which such charges appear on consumers' mobile phone bills and enable consumers to block the placement of these charges on their bills.
Attorney General Jepsen announced similar settlements with AT&T in October 2014 and T-Mobile in December 2014. All four mobile carriers announced they would cease billing customers for premium text message subscription services in the fall of 2013.
Consumers can submit claims under the settlement by visiting www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com. Through those websites, consumers can submit claims, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts. Consumers who have questions about the settlement can visit the program websites or call the settlement administrators at: (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon). Complaints can also be made by visiting http://www.fcc.gov/complaints or by phone at 1-888-CALL-FCC.
Data cramming can affect both land and mobile telephone lines and can be easily overlooked on consumers' monthly bills. The charges come in an array of forms, such as marketing products or services, and are often disguised in bills as a "service fee" or "monthly charge." These charges can add up to millions of dollars if left unnoticed by the roughly 20 million consumers reportedly affected, according to the FCC. Consumers should thoroughly read their monthly bills and examine charges carefully. If there are any charges that appear to be unwarranted, consumers should contact their telephone providers to resolve the charges.
The state Department of Consumer Protection also accepts and investigates complaints about potential data cramming. Complaints can be made at www.ct.gov/dcp or at 1-800-842-2649.
Assistant Attorneys Lorrie Adeyemi, head of the Attorney General's Consumer Protection Department and Michele Lucan are assisting Attorney General Jepsen with this matter.
Office of the Attorney General: