Those entitled to receive this money are consumers of both companies who have been charged for services they did not ask for. Technically, cramming takes place when a company starts offering their clients specific features without getting their full consent for it, and then asks them to pay for it.
“For too long, consumers have been charged on their phone bills for things that they did not buy,” Federal Communications Committee Chairman Tom Wheeler told in press release, claiming there is no doubt service provides are breaking federal law by charging consumers for these practices.
The extra services generally include add-ons such as celebrity text messages, sports scores or horoscope. The consumers more or less benefit from this kind of utilities, but since they did not ask for or even explicitly agree upon getting them in the first place, most of the time assume they are for free. But when they receive the bill and see that the company has been charging them for it all along, well, that’s an entirely different story.
The Federal Communications Committee has recently stepped in to put an end to these practices. AT&T, who had to settle for a payment of $105 million following allegations of cramming, was only the first victim. T-Mobile followed soon after.
Verizon’s and Sprint’s combined $158 million settlement is Tom Wheeler’s biggest win so far. In fact, it is the consumers who scored the biggest victory, since only $4 million of what Verizon has to pay will go into federal pockets. Most of the amount will go into a “consumer redress program” created to reimburse those who fell victim to cramming. Another $16 million will be paid to state governments.
However, the main purpose of the whole campaign is to stop companies from charging consumers for services they did not ask for in the future. As far as Verizon and Sprint are concerned, they have both learned their lesson. The settlement says that from now on they won’t “offer commercial third-party PSMS charges,” and will also be forced to “obtain informed consent from customers” before asking them to pay for extra services.
People who want to know if they are eligible for a refund will have to file a complaint at each of the companies involved. Reimbursements are only starting, so you still have time.
Image Source: CNBC