The Consumer Financial Protection Bureau (CFPB) has announced that it has reached settlements with wireless service providers Sprint and Verizon regarding allegations by the CFPB that both companies were guilty of cramming and have asked the federal courts for approval of the settlements. For years I have been warning you about the dangers of cramming. Cramming is the name for putting unauthorized third party charges on a consumer’s telephone bill without the knowledge or approval of the consumer. This has long been a problem with landline phones and in recent years has become a major problem with cellular service. There are many ways that these unauthorized charges make their way to a victim’s phone. Sometimes, consumers actually unknowingly sign up for premium texting services that may be for things such as flirting tips, horoscopes or celebrity gossip. Other times, unscrupulous merchants merely tricked consumers into providing their cell phone numbers to which these merchants added the charges without providing anything in return. The charges range from a single monthly charge of up to $14.99 to regular, continuous monthly charges of $9.99 per month. Many consumers did not even notice these charges in their bills, which often were not clearly designated. Both Sprint and Verizon received between 30% and 40% of the revenue generated by these illegal charges.
Pursuant to the terms of the settlements, Sprint and Verizon will refund 120 million dollars to affected customers as well as pay 38 million dollars in federal and state fines.
First and foremost, even if you are not a Sprint or Verizon customer, everyone should closely review their cellphone bill each month to make sure that you understand every charge that appears. If anything is not clear to you, you should contact the cellphone service provider for an explanation.
If you are a Verizon customer who has been victimized by cramming, you can submit a claim for a refund by going to http://www.CFPBSettlementVerizon.com or by calling (888)-726-7063. If you are a Sprint customer who has been victimized by cramming, you can submit a claim for a refund by going to http://www.SprintRefundPSMS.com or call (877) 389-8787.