Federal Watchdog says Sprint Allowed Millions in Unauthorized Charges on Consumers’ Bills

Photo (cc) by JeepersMedia

The Consumer Financial Protection Bureau says Sprint has cost consumers tens of millions of dollars in unauthorized third-party charges.

According to a lawsuit filed by the CFPB, Sprint’s billing system gave third parties “virtually unfettered access” to the accounts of its customers, which allowed those parties to “cram” millions of dollars of unauthorized charges onto wireless bills between 2004 and December 2013.

A CFPB press release said:

Sprint outsourced payment processing for … digital purchases to vendors called “billing aggregators” without properly monitoring them.

The lack of oversight gave aggregators near unfettered access to consumers’ wireless accounts. Sprint’s system attracted and enabled unscrupulous merchants who, in some cases, only needed consumers’ phone numbers to cram illegitimate charges onto wireless bills. The charges ranged from one-time fees of about $0.99 to $4.99 to monthly subscriptions that cost about $9.99 a month. Sprint received a 30 to 40 percent cut of the gross revenue from these charges.

The press release said most of the affected Sprint customers were targeted online.

Customers clicked on ads that brought them to websites asking them to enter their cellphone numbers. Some merchants tricked consumers into providing their cellphone numbers to receive “free” digital content and then charged for it. Other merchants simply placed fabricated charges on people’s bills without delivering any goods or even communicating with them.

According to Reuters, Sprint is disputing the allegations.

“We strongly disagree with [the CFPB’s] characterization of our business practices,” Sprint spokeswoman Stephanie Vinge Walsh said in a statement.

“It appears the CFPB has decided to use this issue as the test case on whether it has legal authority to assert jurisdiction over wireless carriers,” she said in an email.

In a similar case, the Federal Trade Commission sued T-Mobile in July over alleged cramming. The Federal Communications Commission settled a cramming lawsuit with AT&T in October.

According to the CFPB, Sprint, the third largest wireless carrier in the U.S., is accused of violating the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on unfair practices in these ways:

  • Allowing illegal third-party cramming charges. Sprint’s payment and billing system allowed third parties to easily include unauthorized fees on their customers’ bills.
  • Automatically billing for unauthorized charges. Sprint automatically enrolled customers in third-party billing, without their knowledge, enabling phony fees to slip by customers because they weren’t aware they should be looking for them.
  • Turning a blind eye to red flags about third parties. “Sprint continued to outsource to billing aggregators despite lawsuits about cramming against the very same aggregators that Sprint used,” the CFPB said.
  • Disregarding customer complaints about illegitimate charges. Sprint didn’t track customer complaints about the phony charges, nor did it provide quick remediation to consumers impacted by the unauthorized fees, the agency said.

The CFPB is seeking refunds for affected consumers, as well as penalties.

Are you a Sprint customer? Have you been impacted by cramming? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Ways Retailers Trick You Into Spending More
10 Ways Retailers Trick You Into Spending More

Think you’re a savvy shopper? Find out how retailers persuade you to dig more deeply into your wallet.

10 Mistakes That Cost You Money at Warehouse Stores
10 Mistakes That Cost You Money at Warehouse Stores

Wholesale clubs might have great deals, but these mistakes will cost you.

10 U.S. Jobs That Are Disappearing Fastest
10 U.S. Jobs That Are Disappearing Fastest

Think twice before pursuing these shrinking occupations.

The 13 Worst Types of Tickets for Your Car Insurance Rate
The 13 Worst Types of Tickets for Your Car Insurance Rate

Some types of traffic violations can drive your car insurance rate dramatically higher.

10 Things That Can Ding Your Social Security Payments
10 Things That Can Ding Your Social Security Payments

Here are 10 things that could mean less money in your pocket during retirement.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers
This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

11 Generic Products You Should Buy at Costco
11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

These Major Appliances Got the Worst Reviews in 2020
These Major Appliances Got the Worst Reviews in 2020

Consumer Reports says these home products got the worst ratings from experts.

8 Tips for Retiring Comfortably on Social Security Alone
8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

3 Cable TV Companies Hiking Prices for 2021
3 Cable TV Companies Hiking Prices for 2021

Still married to your cable company? Hold on to your wallet!

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.