Sprint is being sued by the Consumer Financial Protection Bureau for allegedly billing tens of millions of dollars in unauthorized third-party charges to their customers. The CFPB is demanding that the nation’s third-largest wireless carrier refund all affected customers and pay penalties for their actions.
According to the complaint, Sprint operated a billing system that allowed third-party providers to “cram” unauthorized charges onto consumers’ bills. The bureau also suggests Sprint disregarded the red flags about these third-party providers, and ignored consumer complaints about these charges.
“Consumers ended up paying tens of millions of dollars in unauthorized charges, even though many of them had no idea that third parties could even place charges on their bills,” CFPB Director Richard Cordray said in a statement.
Many mobile carriers use third-party billing to collect money for apps, games, books and other digital products a customer may purchase on his phone. Sprint did not properly monitor these “billing aggregators,” and gave them nearly unlimited access to their customers’ accounts. This resulted in an array of excess charges, ranging from $0.99 to $4.99. Sprint received a 30% to 40% cut of this incremental revenue.
There are no details yet about the specific sum of the CFPB suit, but it will cover all of the “crammed” charges, along with penalties to prevent the company from overcharging customers in the future.