‘Cramming’ Lands Verizon, Sprint in the Dock
U.S. regulators have fined Verizon Communications and Sprint for data cramming to resolve the pending inquiry against the telecom providers. After last year’s case, wherein AT&T and T-Mobile had to pay $105 million and $90 million, respectively, as fine to settle cramming investigations against them, is this year’s similar case of Verizon Communications Inc and Sprint Corp.
Tuesday, May 12, saw a formal announcement made by the Federal Communications Commission wherein it charged Verizon Wireless and Sprint, a combined $158 million to resolve allegations of duping customers with unauthorized charges.
The issue at hand was that of ‘cramming’. These are basically the third party services that are charged by the operators. What has landed them in the soup, is the fact that the customers had never subscribed to these services, to begin with. Therefore, they act as ‘push’ applications wherein the customers is forced to pay for something that he never initiated.
FCC indicted Verizon and Sprint with similar offenses. Both the operators charged customers millions of dollars for premium third-party text message services. Not only this, the companies also levied fees of about $10 per month for the services. Further, they kept about 30 percent of the unauthorized fees they billed and also refused refunds for the charges, to many consumers.
Thus, Verizon and Sprint invited fines to the tune of $90 million and $68 million, respectively, under the agreement. Out of this, nearly $120 million would go towards reimbursing consumers hit with the charges.
Meanwhile, FCC is making attempts to protect users from cramming. What is required is that wireless carriers should be directed not to charge for third-party messaging services, as well as clearly identify any third-party fees on bills to customers.
If taken combined, the four largest US wireless carriers have invited penalties, in the form of fine, totaling to as much as $353 million.
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