In early July, a U.S. judge approved a $50 million settlement between Sprint
and the Consumer Financial Protection Bureau. This settlement is part
of a broader settlement regarding allegations Sprint billed customers
for services they neither wanted, nor approved. In May, 2015, Sprint agreed
to pay a total amount of $68 million in order to settle complaints regarding
“cramming.” Cramming occurs when small charges are added to
a consumer’s bill without consent or disclosure, and is a form of fraud.
How Cramming Charges are Disguised
The cramming charges are typically disguised as a type of tax or fee, and
can range from a few cents to several dollars. Some of the cramming fees
were for a horoscope service or for “fun facts”. According
to the FCC, cramming fees are disguised by calling them a “min.
use fee,” a “subscription,” a “member fee,”
or “activation.” The company who engages in cramming is banking
on the fact that the consumer will simply overlook the charges and pay
them. In 2007, cramming was the fourth most common complaint from consumers
and occurs most often on cell phone or home phone bills.
Judge Requires More Information Prior to Signing Off on May Settlement Agreement
When Sprint agreed to the $68 million settlement in May, U.S. District
Judge William Pauley required more evidence that the deal was fair for
all those involved before he would sign off on it. In fact, Judge Pauley
noted the information initially provided in the settlement agreement offered
minimal detail. In a separate deal, Verizon agreed to pay $90 million
in a settlement over similar cramming accusations and AT&T agreed
to pay $105 million. Consumers harmed by Sprint’s cramming practices
will receive refunds from the $50 million, while $18 million will go to
state governments and fines to U.S. Treasury.
Consumers Who Challenged Cramming Funds Were Denied Refunds
Most of the consumers who noticed the cramming charges in the past and
attempted to challenge them were denied refunds, despite the fact the
carriers were unable to show the charges were authorized. Both Sprint
and Verizon have been ordered to cease offering third-party messaging
services without consumer agreement. Not only must they ask the consumer
for consent on any third-party charge, those charges must be clearly labeled
on the customer’s monthly bill and the customer must be able to
block any unauthorized charges. From this point on, Sprint and Verizon
will be required to submit regular reports to the FCC in order to show
they are paying the required refunds and complying with the orders of
Submitting a Claim for Cramming Charge Refund
Both Sprint and Verizon say they put a halt to cramming services before
the federal investigations began, claiming their primary focus is on customer
service. According to the settlement agreement, the $50 million designated
for consumer refunds encompasses a full ten years of cramming on the part
of Sprint. Sprint has developed a designated website which allows customers
to file requests for refunds.
If you submit a claim to Sprint for cramming charges, don’t hold
your breath waiting for your refund. Customers have until December 31,
2015 to file for a refund for any charges billed since July 1, 2010, and
it is unclear when the refunds will be issued. Some companies offer consumer
protection websites which help consumers detect cramming as soon as it
happens. These websites also help customers to generally better understand
their monthly phone bill.
If you believe your wireless provider has placed unauthorized charges on
your monthly bill, or you would like further information concerning this
investigation, contact the consumer protection lawyers at Golomb &
Honik today. We will review your claim to determine if you, too, have
been a victim of cramming.
Schedule a free consultation call the
Philadelphia class action lawyers at Golomb & Honik today at (215) 278-4449 or fill out our confidential
The national consumer class action lawyers at Golomb & Honik have successfully
represented individuals in Philadelphia, Pennsylvania, New Jersey, and
throughout the United States.