Cell Phone Providers to Pay for Cramming Schemes

Have you ever gotten horoscope readings, sports scores, or medical alerts texted to you? Did you pay for them? If so, you could see a credit on your cell phone bill. These "cramming" schemes recently resulted in two nationwide settlements that could put money back in your pocket.

Cell phone providers like Verizon, Sprint, and AT&T have settled with the Federal Communications Commission after the agency discovered the businesses were "cramming." They were charging their clients a monthly fee for third-party premium text messaging services. The companies then kept a portion of those fees, a practice that the FCC has determined was illegal.

The problem is that the cell phone providers could not prove that their customers requested or authorized the third-party services they were being charged for. When customers complained, the cell phone companies couldn't say why they had been charged these "PSMS" fees.

Because of this, on May 12, 2015, the FCC announced a settlement with Verizon and Sprint to repay their customers for these unauthorized third-party charges. Verizon will pay $90 million and Sprint will pay $68 million.

Michigan residents are among the class of consumers who may qualify for a refund. M-Live estimates that there are 726,150 Verizon customers and as many as 393,975 Sprint customers who may see credits on their cell phone bill.

AT&T and T-Mobile have been caught in the act too. An earlier cramming settlement entitled AT&T customers to a share of a $105 million dollar Federal Trade Commission settlement reached in October 2014.

Most cell phone providers compete on the price of their services, only to tack on fees and charges that their customers never expected. But Michigan Attorney General Bill Schuette doesn't like that system:

"Consumers should never have to pay for cellphone services they did not request. . . . I am pleased that as a result of this and other settlements with cellular providers, we are better able to protect consumers from cellphone cramming going forward. We will continue to aggressively pursue anyone seeking to skirt the rules at the expense of Michigan families and their hard-earned dollars."

But the work isn't over for cell phone consumers. It can be difficult to tell if you have been charged with a cramming fee. According to the FTC, AT&T consumers were given deceptive phone bills that lumped third-party charges in with its own mobile phone services. That makes cramming charges hard to find, and to prove.

Now Sprint and Verizon customers are facing the same hurdles. Consumers who believe they have been charged for third-party premium text messages can report cramming through www.sprintrefundpsms.com and www.cfpbsettlementverizon.com.

Dani K. Liblang is a consumer protection lawyer for The Liblang Law Firm, P.C., in Birmingham, Michigan. She protects consumers against fraudulent collections practices. If you believe you have been a victim of cramming or other consumer protection violations, contact The Liblang Law Firm, P.C., today for a free consultation.