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Cedar Rapids, Iowa 52401
DES MOINES - Iowans who get their cellular-phone service from Sprint or Verizon Wireless may be in line for refunds as part of a national settlement announced Tuesday, according to Iowa Attorney General Tom Miller.
Sprint and Verizon Wireless, two of the nation's three largest wireless carriers, will offer refunds to customers via a $158 million joint state-federal settlement.
It was alleged the companies engaged in 'mobile cramming,” or placing unauthorized charges on consumers' mobile phone bills, Miller's office said.
Miller joined attorneys general of all 50 states and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission in settlements with Sprint Corp. and Cellco Partnership, which does business as Verizon Wireless. The companies will make combined payments of $360,000 to the attorney general's consumer education and litigation fund.
'These two settlements, which follow two previous settlements, mean customers of the four largest wireless carriers who were forced to pay crammed charges qualify for payments,” Miller said in a statement. 'And we've ended the practice that cost consumers for services they didn't want and didn't use.”
Under the terms of the settlements, Miller's office said Sprint will pay $12 million to the state attorneys general, including more than $206,000 to Iowa, and $6 million to the FCC, while Verizon will pay $16 million to the attorneys general, including more than $154,000 to Iowa, and $4 million to the FCC. The claim deadline for the Sprint and Verizon settlements is Dec. 31.
Consumers who have been 'crammed” often have charges, typically $9.99 per month, for 'premium” text message subscription services (also known as Premium Short Message Service, or PSMS subscriptions) such as horoscopes, trivia, and sports scores that the consumers have never heard of or requested, according to Miller's office.
Overall, Sprint will pay $68 million and Verizon will pay $90 million. Of these amounts, Sprint and Verizon will provide $50 million and $70 million, respectively, to consumers who were victims of cramming. Sprint and Verizon will each distribute refunds to eligible consumers through redress programs that will be under the supervision of the Consumer Fraud Protection Bureau.
Sprint and Verizon are the third and fourth mobile telephone providers to enter into a nationwide settlement to resolve allegations regarding cramming, according to the Iowa attorney general's office.
Miller and state attorneys general reached similar settlements with AT&T, the nation's second-largest carrier, in October 2014 for $105 million and with T-Mobile, the nation's fourth-largest carrier, in December 2014 for $90 million. All four mobile carriers announced they would cease billing customers for commercial PSMS in fall 2013.
The settlements, like the AT&T and T-Mobile settlements, require Sprint and Verizon to stay out of the commercial 'PSMS” business-the platform to which law enforcement agencies attribute the lion's share of the mobile cramming problem. The four carriers also must take steps designed to ensure that they only bill consumers for third-party charges that they authorized, including obtaining consumers' express consent before billing consumers for third-party charges and ensuring that consumers are only charged for services if the consumers have been informed of all material terms and conditions of their payment.
Consumers can submit claims under the redress programs by visiting www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com. On those websites, consumers can submit claims, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts.
Consumers with questions can find information on the program websites or call the settlement administrators: Sprint: (877) 389-8787; Verizon: (888) 726-7063.