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Sprint Sued by Feds Over "Cramming" as FCC Readies $105 Million Fine

Sprint joins AT&T and T-Mobile in getting slammed by federal officials for allowing unauthorized third-party charges.

Susan Law Cain / Shutterstock

The Consumer Financial Protection Bureau sued Sprint on Wednesday, alleging that for years the wireless carrier profited by allowing third parties to tack millions of dollars in unauthorized charges onto subscribers’ bills.

Sprint profited from the practice and allowed it to continue “despite numerous red flags, such as high refund rates and complaints from customers, law-enforcement agencies and consumer groups,” the CFPB lawsuit contends. The agency wants the company to provide subscriber refunds as well as pay a penalty for its actions.

In a statement, the wireless carrier said it was “disappointed that the CFPB has decided to target Sprint on this issue, and we strongly disagree with its characterization of our business practices.”

“We recognize this is an important issue for our customers, and we consistently have encouraged any customers who think they may have incurred an unauthorized third-party charge on their phone bill to contact Sprint to resolve the issue,” Sprint spokeswoman Stephanie Vinge Walsh said.

The lawsuit is just the latest in a series of efforts by Washington consumer protection agencies to punish wireless carriers for allowing “cramming,” or unauthorized charges placed on subscribers’ bills by third parties for bogus subscriptions to things like horoscopes or celebrity gossip text messages.

Sprint, AT&T and other wireless carriers stopped allowing such third-party charges last December. But they’ve spent most of 2014 trying unsuccessfully to fend off complaints from agencies seeking subscriber refunds and penalties for the company for allowing the practice for so long.

The Federal Communications Commission is expected to soon levy a $105 million fine against Sprint over the cramming issue. The agency’s commissioners haven’t yet approved the fine, but an FCC spokeswoman said Wednesday that the agency has been “pursuing joint enforcement actions to protect consumers from unauthorized fees on their wireless bill” on Sprint’s as well as “other cases.”

In October, AT&T agreed to pay $105 million to settle a similar Federal Trade Commission complaint. The FTC said upward of $80 million would be returned to affected subscribers. In July, the FTC sued T-Mobile over a similar cramming complaint. The case is ongoing.

Verizon is the only large carrier that has not yet either been sued by federal officials or settled a complaint.

This article originally appeared on Recode.net.

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