Verizon, Sprint Agree To Pay $158 Million For Cramming Charges

According to the Consumer Financial Protection Bureau (CFPB), Sprint Corp S and Verizon Communications Inc. VZ have agreed to pay $158 million for their role in alleged illegal third-party billing of their customers. The process, known as “cramming” cost customers millions of dollars over the decade spanning from 2004 to 2013.

What Is Cramming?

According to the CFPB, cramming worked like this: customers were targeted online via ads asking them to enter their cell phone number in exchange for free products or services. One customers entered their number, their accounts were charged without the customers’ consent. Often times, customers never even received the goods or services promised.

According to the CFPB, Verizon and Sprint received as much as 40 percent of the cut from these cramming efforts.

Nothing New

Unfortunately, the Verizon and Sprint settlement is just the latest cramming settlement involving major telecommunications companies. AT&T Inc. T agreed to a $105 million settlement for cramming in October 2014, and T-Mobile US Inc TMUS agreed to a $90 million cramming settlement in December 2014.

The Terms

According to the terms of the settlement, Sprint and Verizon will pay a combined fine of $38 million in federal penalties, as well as issuing $120 million in refunds to affected customers. “Today’s actions will put $120 million back into the pockets of harmed customers and require these companies to improve their billing practices going forward,” CFPB Director Richard Cordray said on Tuesday.

Customers wishing to seek a refund can submit a claim form online at either www.CFPBSettlementVerizon.com or www.SprintRefundPSMS.com.