Texas AG announces $158M mobile cramming settlements with Sprint, Verizon

By David Yates | May 14, 2015

Resolving charges of mobile cramming, Attorney General Ken Paxton announced Monday that settlements had been reached with Sprint and Verizon worth $158 million.

Mobile cramming is a modern version of a long-time scam in which consumers' phone bills are used as a vehicle for unauthorized charges placed by third parties, according to the Federal Trade Commission.

All 50 states, including the federal government and District of Columbia, were involved in the action, ending allegations that Sprint and Verizon placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumers.

“Cramming takes real, hard-earned dollars out of Texans’ pockets without their knowledge or approval,” said Paxton in a May 12 statement. “Busy Texans should not have to worry about unauthorized charges stealthily appearing on their monthly mobile phone bills, and this settlement will make available more up-front, easily-accessible information about their account.”

Consumers who have been “crammed” often have charges, typically $9.99 per month, for “premium” text message subscription services that the consumers have never heard of or asked for, covering such topics as horoscopes, trivia, and sports scores.

Similar settlements were previously reached with AT&T in October of 2014 ($105 million), and T-Mobile in December of 2014 ($90 million).

All four mobile carriers announced they would cease billing customers for commercial PSMS in the fall of 2013.

Sprint, under the terms of the settlements, will pay $68 million and Verizon will pay $90 million.

Texas is receiving more than $1.65 million for its participation in the Sprint and Verizon settlements. The national mobile cramming settlements with the four mobile carriers have netted a total of $353 million, with $290 million of that amount going to restitution, which can also be accessed by Texans.

Consumers can submit claims under the redress programs by visiting www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com.

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