Nevada joins in $158M settlements in ‘mobile cramming’ case

Nevada and 49 other states have reached $158 million in settlements with Sprint Corp. and Verizon Wireless to resolve allegations that the companies engaged in an illegal practice known as “mobile cramming.”

According to a statement released Tuesday by the Federal Communications Commission, investigations revealed that the companies billed customers millions of dollars for unauthorized third-party premium text messaging services — a practice called “cramming.”

“Consumers rightfully expect their monthly phone bills will reflect only those services that they’ve purchased,” Travis LeBlanc, chief of the FCC’s Enforcement Bureau, said in the statement. “Today’s settlements put in place strong protections that will prevent consumers from being victimized by these kinds of practices in the future.”

Attorney General Adam Laxalt announced Nevada’s role in the settlements Tuesday.

“Mobile cramming is illegal, and consumers deserve to know for what they are being billed,” Laxalt said in a statement. “This settlement will enable those Nevadans affected to be refunded for unauthorized charges. As always, this office will continue to hold those accountable for exploiting consumers.”

According to the statement from his office, his Bureau of Consumer Protection joined the attorneys general of 49 states and the District of Columbia, the Consumer Financial Protection Bureau and the FCC in reaching the settlements.

Consumers who have been “crammed” are typically charged about $9.99 a month for premium text message, or PSMS, subscription services, according to the statement. These subscriptions are for services such as horoscopes, trivia and sports scores.

The settlements require Sprint and Verizon to provide $50 million and $70 million, respectively, to consumers who were victims of cramming. Each company will distribute refunds to harmed consumers through redress programs under the supervision of the Consumer Financial Protection Bureau.

Sprint also will pay $12 million to the attorneys general and $6 million to the FCC, while Verizon will pay $16 million to the attorneys general and $4 million to the FCC.

Nevada will receive about $353,000 for its participation in the Sprint and Verizon settlements, according to the state attorney general’s office.

Consumers who believe they have been affected by mobile cramming may submit claims to redress programs by visiting www.sprintrefundpsms.com or www.cfpbsettlementverizon.com. Those with questions about the programs may call the settlement administrators at 877-389-8787 (Sprint) or 888-726-7063 (Verizon).

A total of $353 million in penalties and restitution have been brought against the country’s four largest wireless carriers, with a total of $267.5 million designated for affected customers, according to the FCC.

Nevada will receive a total of about $834,000 from all the settlements, according to the attorney general’s office. All four mobile carriers, which include AT&T Inc. and T-Mobile US Inc., announced they would stop billing customers for commercial PSMS in the fall of 2013.