Restitution for unauthorized texting charges leads to $158 million “cramming” payouts nationally
OLYMPIA — Attorney General Bob Ferguson today announced that more than 750,000 Washington Sprint and Verizon customers will be eligible for refunds for unauthorized charges on their cell phone bills as a result of legal action by his office. The restitution for Washington consumers is part of a nationwide $158 million agreement that resolves allegations that the companies placed unauthorized third-party service charges on subscribers’ telephone bills.
An estimated 774,900 Washington customers were wrongly charged millions of dollars for unauthorized services. Consumer victims of this practice, called “cramming,” are socked with charges, typically $9.99 per month, for “premium” text message services (PSMS) — such as horoscopes, trivia, and sports scores — that they have never requested or often even heard of.
“I will not tolerate deceptive billing practices,” Ferguson said. “My office will hold any company accountable that tries to hide unauthorized charges in the fine print of a consumer’s bill.”
Ferguson urged Washington consumers to obtain the refunds they deserve by submitting claims for reimbursement to Verizon and Sprint. (Claims instructions below.)
As the result of the states’ legal action, Verizon and Sprint will pay restitution to consumers around the country in the form of refunds or debt forgiveness. The proportion of the settlement going to Washington consumers depends on their participation rate, so consumers are urged to visit the websites or call the phone numbers listed below promptly.
Verizon and Sprint are the third and fourth mobile phone providers to enter into nationwide agreements to resolve allegations regarding cramming. Ferguson announced similar agreements with AT&T in October of 2014 and T-Mobile in December of 2014. The national mobile cramming settlements, which cover the period July 2010 to June 2015, now total $353 million. All four mobile carriers announced they would cease billing customers for commercial PSMS in the fall of 2013.
The agreements require Verizon and Sprint to stay out of the PSMS business, which law enforcement agencies believe represents the lion’s share of the cramming problem.
The companies must also take steps to ensure they’re only billing customers for charges that have been authorized. These steps include:
- Obtaining customers’ express consent before billing for third-party charges, and ensuring consumers are only charged for services if they are informed of all material terms and conditions of their payment;
- Providing a full refund or credit to any customer billed for unauthorized third-party charges in the future;
- Informing new customers that they can either block third-party charges or choose to use their mobile phone to pay third-party charges;
- Presenting third-party charges in a dedicated section of consumers’ mobile phone bills, which clearly distinguishes them from T-Mobile’s charges and contains information about how to block third-party charges.
The Washington Attorney General’s Consumer Protection Division worked with the attorneys general of all 49 States and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission to bring about today’s agreements.
In addition to restitution of $70 million and $50 million respectively, Verizon and Sprint will reimburse the attorneys general for costs and fees, as well as pay a settlement to the Federal Communications Commission.
TO REQUEST A REFUND:
Affected customers can submit claims, find information about refund eligibility, and request a free account summary that details PSMS purchases on their accounts at the websites below.
Verizon Consumers can submit claims by visiting www.CFPBSettlementVerizon.com or calling the claims administrator at (888) 726-7063 (Verizon).
Sprint customers can submit claims at www.SprintRefundPSMS.com or call (877) 389-8787 (Sprint).
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov