Telecommunications giants Verizon Wireless and Sprint Corp. have agreed to refund a combined $120 million to their customers, including more than 1.1 million customers in North Carolina, as part of a nationwide legal settlement over unauthorized charges tacked onto customers’ cell phone bills.
The settlements involved the practice of mobile cramming, or adding extra charges for services such as horoscopes, trivia and sports scores. Customers unwittingly signed up for the services when they entered online contests or made other transactions. The charges were typically $9.99 a month for the premium text message subscription service.
“In most cases, consumers were not told they were signing up for subscription services that could cost them money,” according to the announcement of the settlement from the N.C. Attorney General’s office.
Both companies said in statements emailed to reporters on Tuesday that they had stopped allowing premium text messaging before the government investigation began. Sprint spokesman Jeffrey Silva said the company had already returned “tens of millions of dollars” to its customers.
Verizon Wireless spokeswoman Debra Lewis said the settlement “reflects Verizon’s continued focus on putting customers first.” She added that the company had “rigorously protected” its customers from unauthorized charges.
The settlement included all 50 states and the District of Columbia as well as the Consumer Financial Protection Bureau and the Federal Communications Commission. Verizon will pay $90 million and Sprint $68 million, which comes to $120 million in customers refunds and $38 million in penalties and other payments to the states. North Carolina will receive $537,689.72 from the companies.
About 733,200 Verizon customers are expected to be eligible to get money back, while as many as 397,800 Sprint consumers in the state could get refunds.
Last year, AT&T and T-Mobile entered similar agreements. In 2013, all four carriers said they would end the practice, the AG’s office said.
The Associated Press contributed.