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Verizon and Sprint Fined by FCC for Cramming

News by admin on Wednesday May 13, 2015.

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Verizon and Sprint have settled with the FCC to the tune of $158 million as both companies were fined for cramming charges onto consumers. The biggest (Verizon) and third largest (Sprint) carriers in the United States will split the fine, with Big Red forking out $90 million and Sprint paying the FCC $68 million.

$120 million of the paid fine will be pushed back out to customers who had to pay for services they were not subscribed too, including text messages. Known as cramming, both Verizon and the Now Network were sending customers premium text messages such as jokes and horoscopes and charging between $0.99 and $14 for these messages for which customers were not subscribed. The FCC says the average amount made from each text was $9.99, with Verizon keeping around 30% of the revenue made and Sprint holding on to 35%.

Both carriers then refused to offer refunds, leading to customers taking the issue up with the FCC, with the regulatory body then finding no proof from either company that customers had signed up for the service.

"For too long, consumers have been charged on their phone bills for things they did not buy. We call these fraudulent charges 'cramming,' and with today's agreements we are calling them history for Verizon and Sprint customers."-Tom Wheeler, chairman, FCC

It's not just Verizon and Sprint who are cramming, the remainder of the big four U.S. carriers (T-Mobile and AT&T) settled their own FCC dispute last year, with AT&T paying $90 million and T-Mobile fined $105 million.

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