WASHINGTON-- Sprint Corp and Verizon Wireless will pay a total of $158 million to resolve claims by U.S. regulators that the wireless carriers separately billed customers millions of dollars in unauthorized charges for premium text messages, authorities said Tuesday.

The payments, $90 million from Verizon and $68 million from Sprint, include $120 million in refunds to affected customers, the Consumer Financial Protection Bureau said. The remaining $38 million is to be paid in federal and state fines, the agency said.

The action by the CFPB, Federal Communications Commission and several state attorneys general is the latest in a string of cases regulators have brought against wireless companies over the so-called "cramming" of unauthorized third-party charges onto cellphone bills.

Both Verizon and Sprint neither admitted nor denied the allegations as part of the settlement.

A Verizon spokesman said the company had stopped allowing companies to place charges for premium text message services on customers' bills "well before any government action."

A Sprint spokesman said the settlement gives customers who believe they were wrongfully billed the ability to get a refund. The company also said it had returned "tens of millions of dollars long before the government initiated its investigation of our industry."

Last fall, AT&T Mobility agreed to pay $105 million and T-Mobile USA, Inc. agreed to pay $90 million to resolve similar cases.

"For too long, consumers have been charged on their phone bills for things they did not buy," FCC Chairman Tom Wheeler said.

At issue are payments customers made to purchase apps on their phones. The purchases would appear as charges on customers' phone bills, but the wireless carriers outsourced the processing of the payments to third-party vendors, the consumer bureau said.

Those vendors would often bill for premium messages associated with providing the purchases, ranging from one-time fees of under $5 to monthly subscriptions of $9.99, regulators said. Customers might purchase a monthly subscription for dating tips, horoscopes, or sports scores without realizing that the subscriptions also included a premium text messaging fee, according to the CFPB's complaints. Sprint and Verizon would get a 30% to 40% cut on the gross revenue, according to the agency.

Wireless carriers generally no longer use the premium messaging services at issue, used generally through 2013.

The Sprint settlement comes after the CFPB sued the company over the alleged conduct in December.

Write to Gautham Nagesh at gautham.nagesh@wsj.com

Access Investor Kit for SoftBank Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3436100006

Access Investor Kit for AT&T, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US00206R1023

Access Investor Kit for Verizon Communications, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US92343V1044

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

SentinelOne (NYSE:S)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more SentinelOne Charts.
SentinelOne (NYSE:S)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more SentinelOne Charts.