Roger Fingas
U.S. carriers Sprint and Verizon will together spend $158 million to settle government complaints that they let third-party firms bill subscribers millions in unauthorized charges, a practice known as "cramming," the Federal Communications Commission announced on Tuesday.
Verizon will pay out the bulk of the cash, $90 million, while Sprint will owe $68 million. Most of the money should go toward refunding money to subscribers — $70 million in the case of Verizon, and $50 million from Sprint. The remaining cash will go to state governments, and fines sent to the U.S. Treasury.
Cramming victims saw bill entries for "unauthorized third-party premium text messaging services," the FCC said, yet were frequently denied refunds, even though neither carrier could prove that the charges were authorized when the FCC asked.
These services would cost anywhere between 99 cents and $14 and month, though a typical amount was $10. Verizon was said to have claimed 30 percent from each charge, while Sprint took in 35 percent.
As further conditions of the settlement, Sprint and Verizon can no longer offer the offending third-party services, and must obtain constent for any future third-party charges, also clearly labeling them on bills. Customers must be able to block such charges, and the carriers will have to regularly report back to the FCC on refunds and rule compliance.
Last year, AT&T and T-Mobile were also ordered to pay cramming-related penalties. The former was required to pay $105 million, and the latter $90 million.
AppleInsider Staff
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
19 Comments
Thanks Uncle Sam! The Telecoms have robbed us each for hundreds--if not thousands--of dollars a year every year since Edison died. I can't wait to receive my share of the $158 million you won back for us after allowing them to become and remain anti-competive monopolists---well, after you pay yourselves and your lawyers/friends/campaign contributers. The $1.08 you left for me will really make a difference!
Sprint should really include that in their television commercials, "We'll cut your bill in half! Now, including cramming!"
Fines like these have been going on for years and obviously aren't effective. Prison time for some cell-company top executives would send a more powerful message.
The bloody thieves.
Yes a very light penalty, they deserve to pay much more for dipping into customers pockets.
:mad:
Unbelievable - yea some prison time ought to be dished out for this. Unauthorised third party services - how does that work ? Wtf does a premium txt message look like anyway ? lol