Consumer Alert

Alaska Joins Sprint and Verizon Cramming Settlements Consumers Eligible for Refunds

The Alaska Office of the Attorney General joined 49 states and the District of Columbia in settlements with Sprint Corporation and Cellco Partnership d/b/a Verizon Wireless resolving allegations that the carriers placed unauthorized charges for third-party services on consumers’ mobile telephone bills, a practice known as “mobile cramming.” Sprint and Verizon also reached agreements with the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB).

The Attorneys General and federal regulators allege that cramming occurred when the carriers placed charges for third party “premium” text message services (also known as PSMS) on consumers’ mobile telephone bills without their knowledge or consent. Consumers were charged an average $9.99 per month for subscription services they never requested, such as horoscopes, trivia, and sports scores. Sprint and Verizon have stopped billing customers for PSMS.

Under the supervision of the CFPB, Sprint will pay $50 million and Verizon will pay $70 million in refunds to customers who were victims of cramming. Consumers can visit the following websites or call the following telephone numbers for information about refund eligibility and how to submit a claim:

The settlements require Sprint and Verizon stay out of the commercial PSMS business and take a number of steps to ensure they do not bill for unauthorized third-party charges, including the following:

  • Sprint and Verizon must obtain customer’s express consent before billing consumers for third-party charges, and refund customers when they are billed for unauthorized charges;
  • Sprint and Verizon are required to tell new customers that their mobile phone can be used to pay for third-party charges, and how those third-party charges can be blocked; and,
  • Sprint and Verizon must present third-party charges in a dedicated section of consumers’ mobile phone bills and clearly distinguish them.

Consumer Protection Unit
May 2015