What Is ‘Mobile Cramming’ and Why Is South Dakota Getting 302K Because of It?

"Mobile Cramming" is a practice conducted by a mobile carrier that charges a customer for 'premium texting services' that they never originally requested.

A good example of this would be unnecessary text services like horoscopes, trivia, and sports news. Mobile customers, often unaware they were being charged, would have to be required to opt out of the third-party service in order to stop the charges from being applied to their monthly bill.

These subscriptions usually cost a customer around $10 a month, but they'll end up costing Sprint and Verizon a whole lot more

Both those carriers have agreed to pay a whopping $158 million for charging customers unauthorized third-party fees.

Under the terms of this settlement, Sprint will pay $68 million and Verizon will have to dole out $90 million.

Sprint and Verizon aren't the only two carriers that have been nabbed attempting to use this practice. Last year AT&T agreed to pay $105 million and T-Mobile $90 million in another settlement.

South Dakota will receive about $302,000 from Sprint and Verizon to settle allegations that the companies allowed phony charges on their customers' monthly bills.

Both mobile carriers have agreed to stop offering commercial premium texting services programs under the settlement. In addition, they must now go out of their way to make sure consumers are clearly consenting to any third-party services that will appear on their bill.

As part of the settlement, third-party charges will now have their own dedicated section in the phone bill.

Customers who were affected by mobile cramming can apply for refunds by submitting online claims.

Sprint users need to go to SprintRefundPSMS.com; Verizon users should visit CFPBSettlementVerizon.com.

Source: Business Insider/Rapid City Journal