Sprint Faces Lawsuit for Alleged 'Cramming' - East Idaho News
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Sprint Faces Lawsuit for Alleged ‘Cramming’

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Getty 121714 Sprint?  SQUARESPACE CACHEVERSION=1418857844101Joe Raedle/Getty Images(NEW YORK) — The Consumer Financial Protection Bureau filed a lawsuit on Wednesday against Sprint Corporation for alleged illegal billing of wireless customers for unauthorized third-party charges.

“Today…we are suing Sprint for allowing illegal charges to be crammed onto consumers’ wireless bills,” CPFB Director Richard Cordray said Wednesday. “Consumers ended up paying tens of millions of dollars in [unauthorized] charges…many of these consumers had no idea that third parties could even place charges on their bills.”

The CPFD says that third-party billing involved products such as “premium text messages” or “premium short messaging services.” These products involve ringtones or text messages containing love tips, horoscopes or “fun facts.” Consumers would be charged either a one-time fee between $0.99 and $4.99 or monthly subscriptions costing as much as $9.99 per month. Sprint received a 30- to 40-percent cut of the revenue from those charges, the CPFB says.

According to the CPFB, some of the third-party merchants even tricked consumers into providing their cell phone numbers to receive “free” digital content, and then charged for that content. Others, the CPFB says, simply placed fabricated charges on bills without delivering any goods.

The bureau is accusing Sprint of allowing third parties to illegally charge consumers, automatically billing consumers for illegitimate charges without their consent, disregarding red flags about third parties and ignoring consumer complaints about unauthorized charges.

The bureau says that consumers incurred millions of dollars in illegitimate charges, while Sprint collected hundreds of millions of dollars in revenue.

Earlier this year, AT&T agreed to pay $105 million in a settlement with the Federal Trade Commission for cramming.


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