The Enforcement Bureau of the U.S. Federal Communications Commission (FCC) has reached a settlement with two of the nation’s largest wireless carriers in connection with allegations that the companies billed customers for unauthorized third-party text messaging services, a practice widely referred to as “cramming.”
Under the settlements, Verizon Wireless will pay a total of $90 million and Sprint Corporation will pay a total of $68 million. Most of these payments will be earmarked for programs intended to redress consumer losses that resulted from the carriers’ illegal activities, with the remainder going to the U.S. Treasury and state governments who cooperated with the Enforcement Bureau’s investigation.
In addition to the financial payments, both carriers have also agreed to implement measures to protect consumers against future fraudulent activity. These measures include requiring informed consent from consumers prior to billing third-party charges and offering consumers a free service to block all third-party charges. Verizon Wireless and Sprint are also required to file regular reports with the FCC on their compliance efforts.
In 2014, the FCC reached settlements with AT&T Mobility ($105 million) and T-Mobile ($90 million) to resolve cramming practices by those carriers. Combined with the recent actions against Verizon Wireless and Sprint, FCC enforcement actions have resulted in $353 million in financial penalties levied against the top four wireless carriers in the U.S.