World Economy

Telephone Giants Fined

Telephone Giants FinedTelephone Giants Fined

Telephone giants Verizon and Sprint will pay almost $160 million in fines from the US government for imposing unauthorized charges on its customers. The two companies agreed to settle the matter in the wake of federal investigations, RT reported. The settlement with Sprint and Verizon follows a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) in New York federal court, which charged the telecommunications companies for processing charges for third parties, and for violating the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition of unfair practices. Specifically, the government argued the companies allowed third parties to illegally charge people through their billing system, through a practice called “cramming,” and then profiting from the charges by as much as 35 percent, behavior which victimized millions of people. “Sprint and Verizon had flawed billing systems that allowed merchants to add unauthorized charges to wireless customer bills,” said CFPB Director Richard Cordray in a statement.