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Report: Sprint Faces $105M Phone 'Cramming' Fine

 & Stephanie Mlot Contributor

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Sprint may be facing a $105 million fine from the Federal Communications Commission for unauthorized charges on customers' cell phone bills.

Sprint is reportedly accused of "cramming," or charging customers for unwanted text message alerts, according to The Wall Street Journal.

At issue are bogus fees for monthly subscriptions to services like horoscopes, sports scores, and ringtones.

Sprint declined to comment on the reports; the FCC did not immediately responded to PCMag's request.

AT&T was hit with a $105 million cramming fine in October by the Federal Trade Commission. According to the FTC, customers often did not agree to the charges, which were hidden on AT&T phone bills. AT&T was also accused of failing to stop the bogus charges in a timely manner since it received a 35 percent cut of all sales. Almost 360,000 individuals sought reimbursements from AT&T.

Meanwhile, T-Mobile this summer was also accused of failing to stop bogus charges on customers' bills; an FTC complaint said the Un-carrier made "hundreds of millions of dollars" via premium SMS subscriptions. T-Mobile has denied any wrongdoing.

AT&T, T-Mobile, and Sprint actually pledged last year to stop charging for spam or "premium" texts. When asked about that pledge in the wake of the AT&T fine, Edith Ramirez, Chairwoman of the FTC, said that "the carriers agreed to stop the premium text messaging services as of January 2014," but the AT&T settlement at least "applies to all forms of billing...like direct-carrier billing, so this continues to be an issue."

Complaints about cramming date back to at least 2008, when regulators started requiring carriers to refund customers who were duped into signing up for extra services they didn't want.

The FTC filed its first case in April 2013 against companies that add fraudulent charges to users' mobile phone bills.

In July, the FTC published a set of cramming-related recommendations, which includes five actions to be taken by mobile carriers, merchants who charge directly to phone bills, and billing intermediaries who facilitate charges.

The Senate Commerce Committee also joined the fight, calling on mobile providers to more vigilantly monitor evolving third-party billing practices.

About Our Expert

Stephanie Mlot

Stephanie Mlot

Contributor

My Experience

  • B.A. in Journalism & Public Relations with minor in Communications Media from Indiana University of Pennsylvania (IUP)
  • Reporter at The Frederick News-Post (2008-2012)
  • Reporter for PCMag and Geek.com (RIP) (2012-present)

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