Sprint Faces CFPB Lawsuit Over “Cramming” Fees

The CFPB’s crusade against bill packing, wherein consumers bills are laden with charges for services they neither requested nor approved, rolls on, now with telecom provider Sprint as its target.

The nation’s third largest cell phone carrier faces charges for allowing third parties to add fees to customers’ bills when it knew those customers were likely totally unaware of those charges and would not have approved them if they had been notified.  Sprint is accused by the nation’s consumer watchdog of “turning a blind eye,” to numerous red flags.

“As the use of mobile payments grows, we will continue to hold wireless carriers accountable for illegal third-party billing,” CFPB Director Richard Cordray said.
Though the CFPB has gone after superfluous charging before, this “anti-cramming” lawsuit is a first of its kind insofar as the CFPB is now tuning in to the process of third-party charges that hitchhike on consumers’ mobile phone bills.  Carriers have an incentive to encourage these charges because they typically take a cut of the proceeds from them.  For example, in its suit against Sprint, the CFPB alleges that the phone company took in as much as 40 percent of the crammed fees.

Sprint officials disputed the allegations, saying that “we strongly disagree with (the CFPB’s) characterization of our business practices.” They further encourage customers to come forward if they feel they have been billed in error.  ​


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 AML/KYC Report, Zillow’s Justin Farris tells PYMNTS how the platform incorporates stringent authentication without making the onboarding and buying experiences too complex.

Click to comment