The settlement, approved by U.S. District Court Judge William Pauley, has Sprint forking over $50 million to the Consumer Financial Protection Bureau (CFPB). The remaining $18 million, meanwhile, will be doled out to federal and state fines. According to the settlement, the $50 million will be paid back to customers who were affected by Sprint’s cramming practices over a period of 10 years.
However, the settlement isn’t the end of things for either Sprint or the CFPB. Back when Sprint was slapped with the $68 million fine in May, Judge Pauley didn’t approve the agreement because both sides did not include enough details in the initially-filed papers. In addition, according to Reuters, Judge Pauley complained that entities wishing to receive approval for settlements see judges as nothing more than formality and expect a rubber stamp. Even though Judge Pauley did sign off on the agreement Tuesday, he didn’t reveal whether both Sprint and the CFPB addressed those concerns.
The charges stem from a particularly shady method of revenue collection, which involved Sprint adding seemingly minor increases to its customers’ bills for small fines and services, a practice known as cramming. The problem is, these additions add up, resulting in the monthly bill that’s much larger than what it actually should be. Sprint wasn’t the only one busted, though, as Verizon, AT&T, and T-Mobile were also fined for cramming.
After yesterday’s settlement, Verizon is the sole carrier that has yet to settle. In total, Verizon was fined $90 million for its cramming practices. Regardless, current and former Verizon customers can submit claims for refunds here, while Sprint customers can do so here. If you do submit a claim, don’t expect a check in your mailbox for at least a couple of months, as customers have until December 31, 2015 if they have had any un-refunded PSMS charges billed since July 1, 2010.
