Sprint may be facing a $105 million fine from the Federal Communications Commission for unauthorized charges on customers' cell phone bills. But first, a lawsuit.
The Consumer Financial Protection Bureau (CFPB) today sued Sprint for illegally billing wireless customers tens of millions of dollars in unauthorized third-party charges - like monthly subscriptions to services like horoscopes, sports scores, and ringtones.
"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 in a statement.
According to the CFPB, charges ranged from one-time fees of 99 cents to $4.99, up to monthly subscriptions that cost $9.99. Sprint then received a 30 to 40 percent cut of gross revenues.
The move, according to The Wall Street Journal, could result in a hefty fine fro the FCC, too. Sprint declined to comment on those reports; the FCC did not immediately responded to PCMag's request.
Rival 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.