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Verizon, Sprint Agree To Pay Combined $158 Million Over Cramming Charges

Posted by Soulskill on from the now-only-incredibly-profitable-instead-of-ridiculously-profitable dept.

mpicpp sends news that Verizon has agreed to pay $90 million (PDF), and Sprint another $68 million (PDF), to settle claims that they placed unauthorized charges on their customers's bills. The process, known as "cramming," has already cost T-Mobile and AT&T settlements in the tens of millions as well. Most of the settlement money will go towards setting up refund programs, but Verizon and Sprint will be able to keep 30% and 35% of the fees they collected, respectively. In response to the news, both companies issued vague statements about "putting customers first." They are now banned from charging for premium text message services and must set up systems to ensure informed consent for third-party charges.

19 of 66 comments (clear)

  1. That'll Show 'Em by tapspace · · Score: 5, Insightful

    No doubt these meager fines will deter such practices in the future...

    1. Re:That'll Show 'Em by Anonymous Coward · · Score: 5, Insightful

      Hey, that's not fair. They worked hard for that money, it's not like the people with the phones will miss it, now is it? They didn't work hard for it, otherwise they would have been running their own businesses, rather than working for someone else. What right has the government got to be involved in private business, anyway? (Insert other such stupidies as required.)

    2. Re:That'll Show 'Em by Greyfox · · Score: 2

      They should just pick a number, convert it all to nickels and make the CEO shove them all up his ass. In a televised venue. I bet no company would ever break the law again. At least, not after the first one.

      --

      I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

    3. Re:That'll Show 'Em by Fwipp · · Score: 5, Insightful

      Total revenue from cramming: $X
      Total fees: $X * 0.65
      Revenue after getting caught doing an illegal thing: $X * 0.35

      With penalties like these, there's not even a risk/reward calculation. If you break the law and don't get caught, you're way ahead. But if you break the law and get caught, you're still ahead. There's literally no reason *not* to be evil.

    4. Re: That'll Show 'Em by Anonymous Coward · · Score: 2, Funny

      I've been doing that for years except with pennies!

    5. Re:That'll Show 'Em by ShanghaiBill · · Score: 4, Funny

      There's literally no reason *not* to be evil.

      Well, there is the damage to their reputation

      .
      .
      .

      Just kidding!!!

    6. Re:That'll Show 'Em by wbr1 · · Score: 2
      Verizons NET revenue in 2014:9.625 billion [wikipedia]
      Damages 90M Percentage fees take from net profit = 0.9%

      Less than one percent of one years profit for fucking customers for years. Yeah, that'll teach 'em.

      As usual, this is a show and a sham. Bet some lawyers will make bank though.

      --
      Silence is a state of mime.
    7. Re:That'll Show 'Em by Anonymous Coward · · Score: 5, Insightful

      So let me get this right,

      If I rob a bank and take $100 Million dollars

      a) There would be no prison time for the crime
      b) I get to keep $35 Million for my efforts

      So, if Corporates are people too, surely people can be corporates and treated "fairly" too

    8. Re: That'll Show 'Em by Greyfox · · Score: 2

      Oh god... I probably have some of your ass pennies in my pocket!

      --

      I'm trying to teach myself to set people on fire with my mind... Is it hot in here?

    9. Re:That'll Show 'Em by TheRaven64 · · Score: 3, Insightful

      And yet, when the EU (which understands this and makes fines sufficiently large to discourage the behaviour) goes after a US corporation, there are cries of the EU just being jealous of the success of US companies and wanting their cut of the revenue.

      --
      I am TheRaven on Soylent News
  2. Cramming in a data plan by tepples · · Score: 2

    Does "cramming" include the carrier itself adding a data plan that the customer doesn't want? One of their competitors is known to do that.

  3. Thank God for Gov't Oversight by l0ungeb0y · · Score: 2, Informative

    Helping Corporations turn Crime into Billion Dollar Business Models. Can't wait to see what Amazing Verticals the Free Health Care Market comes up with.

  4. They get to keep some? by NoKaOi · · Score: 4, Insightful

    Verizon and Sprint will be able to keep 30% and 35% of the fees they collected

    WHAT THE FUCK? So pretty much they do something illegal, and only have to give part of the proceeds back?
    Found the question mark:
    1. Commit fraud
    2. Get caught
    3. Bribe^H^H^H Lobby politicians
    4. PROFIT!

  5. Profit is profit... by bjwest · · Score: 2

    ...Verizon and Sprint will be able to keep 30% and 35% of the fees they collected, respectively.

    Both companies do something illegal and still get to hold on to 30% or more of the money? They should be paying that 30 to 35 percent in excess to the customers they ripped off, court costs and fees, 100% of lawyer fees, plus a hefty fine. The victims should be getting 130% of their money back.

    What kind of shit is this, DOJ? How in hell is this going to deter this type of behavior in the future? I'll tell you how - it's not. It will encourage it as just another revenue stream.

    --

    --- Keep the choice with the user..
  6. 35% is not high enough! by MinamataHG · · Score: 4, Interesting

    Some people above just realized there are actually living in a corporatocracy. The rest is smoke and mirrors.

  7. Re:They will still put their customers "FIRST" by h33t+l4x0r · · Score: 2

    Deter them from stealing so little. Next time they need to steal 3x that just to break even!

  8. Still waiting for my $250 refund from AT&T by Poisonous+Drool · · Score: 3, Interesting

    Good luck. AT&T crammed my bill for $250 and I'm still waiting for my check. It's been years.

  9. Obviously by Pollux · · Score: 3, Informative

    Of course it will deter them! Obviously, when you admit that you did wrong and accept responsibility for your misdeeds, the guilt and shame must be overwhelmingly embarrassing! Let's see how hard the hammer of the FCC came down this time...

    This Consent Decree resolves allegations that Verizon charged consumers for third-party products...The Bureau...contends that Verizon violated the law...To resolve the Bureau’s investigation...Verizon will provide a total of $90,000,000 in payments and funds for consumer redress...the public interest would be served by adopting the Consent Decree and terminating the referenced investigation.

    Hmm...I'm confused...[CTRL]-[F]..."Guilty"...No Results Found? ...

    Serving the public interest my ass. Ninety million bucks says Tom Wheeler goes to work for one of these companies the moment he leaves office.

  10. triple damages is law IF guilty by raymorris · · Score: 2

    Current law does allow for treble damages (triple) in a civil suit, IF the defendant intentionally engaged in wrongful behavior. So there could be a class action that could cost them much more the FCC settlement.

    It should be noted that the amount in this story is how much they agreed to pay, without a trial. Had they fought it in court, they may have had to pay more, or it could be found that they actually didn't do anything illegal.