If you’re a Verizon or Sprint customer looking for a piece of a $158 million dollar pie, today might be your lucky day. Both Sprint and Verizon will pay customers $58 million and $90 million dollars respectively due to unauthorized charges on customers bills according to federal agencies. These attempts were allegedly to increase the companies’ overall profits.
This was accomplished through a practice known as “mobile cramming.” Cramming is where wireless carriers partner with third-party service providers to offer premium services such as horoscopes or daily jokes through text messages, and then charge a monthly fee. These charges would then show up (to the surprise of many/most) on the monthly wireless bill and the wireless carrier would receive a cut of the action.
While seemingly innocent on the surface, the issue with this practice is that often the customer would sign up unaware that there are fees involved with the service. Even worse, many customers utilize autopay and likely continued to pay these charges for extended periods of time without consent. In a survey of over 1,300 participants on MyMoneyBlog, 66% of respondents use autopay in some capacity. If such numbers replicate across Sprint and Verizon subscribers, the refund size could be large for some customers.
You may have even been impacted by cramming in the past. Over a decade ago, I saw a television commercial inviting me to text the word “joke” to a 4 digit number for a daily smile. In need of some humor, I obliged. However, I didn’t notice the fine print at the bottom of the screen stating there was a $9.99 fee for the service. (This was when text messaging was in its infancy so such charges were not well-known.) The unhappy ending occured was when my monthly bill arrived and I had been charged $10 dollars for poor humor such as, “What is red and goes up and down… A tomato on an elevator.” I wasn’t happy and I can imagine I am not alone.
The practice of cramming was outlawed by the Federal Communications commission (F.C.C.) last year. Complaints that the companies were not refunding such charges triggered an investigation which led to the current settlement. However, both Sprint and Verizon claim they discontinued the practice well before any investigations were started. The companies both released statements on the matter in an email to reporters. The following is an excerpt from Sprint’s statement according to Washington Post:
This settlement gives our customers who believe they were wrongfully billed for (premium text messaging) services the ability to get a refund, and allows Sprint to continue to focus on enhancing the customer experience,
Verizon shared a very similar sentiment adding that this action “reflects Verizon’s continued focus on putting customers first”, an interesting way to say sorry and thanks for slapping my wrist for the better.
If you are a Sprint or Verizon customer and you were/think you were impacted by the practice of cramming, visit the links below to begin the process of requesting your claim. You won’t likely receive a million dollars, but if you were unlawfully charged, you just might finally get that refund you’ve been waiting for.
Were you impacted by mobile cramming? Let us know in the comments below.