Verizon & Sprint Illegal Billing Practices

As a credit repair expert I often see Verizon & Sprint collections that destroy credit. In most cases consumers have refused to pay based on disagreements in billing. Therefore, I was not surprised by the Consumer Financial Protection Bureau’s (CFPB) recent findings. The CFPB cracked down on Sprint and Verizon for illegally billing consumers over a hundred million dollars in unauthorized billing charges. Many consumers became victims through unauthorized third-party charges by clicking on ads for “free” digital content like ringtones or daily horoscopes, and then got charged without their consent. Most people didn’t notice the illegal billing and had no idea that third-parties could add charges to their wireless bills. This continued undetected for months.

Unfortunately, Sprint and Verizon had billing systems in place that allowed third-party charges, and they also did next to nothing to stop them. In addition, they did very little to respond to any complaints about the issue. This makes sense in light of the fact that they both received hundreds of millions of dollars by acting as a payment processor for these third parties and received a 30-40% cut for every charge.

Luckily for consumers, under the Dodd-Frank Act, the CFPB can hold companies (including payment processors and lenders) accountable for unfair charges like these. If the CFPB settlements are approved, $120 million will be returned directly to the victims.