FCC Plans Massive Fine of Sprint for Bogus Charges

The cell-phone company billed customers for services they never asked for, according to an investigation by federal regulators.

Brendan Sasso
Add to Briefcase
See more stories about...
Brendan Sasso
Dec. 15, 2014, 12:43 p.m.

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion is pre­par­ing to fine Sprint $105 mil­lion for over­char­ging its cus­tom­ers, ac­cord­ing to agency of­fi­cials.

The fine would be tied for the largest the FCC has ever im­posed on a com­pany. In Oc­to­ber, AT&T agreed to pay $105 mil­lion over sim­il­ar al­leg­a­tions.

Ac­cord­ing to the en­force­ment ac­tion, which hasn’t been fi­nal­ized, Sprint billed cus­tom­ers for third-party ser­vices it knew they hadn’t asked for and didn’t want. All five FCC com­mis­sion­ers are re­view­ing the pro­posed fine, but they haven’t voted to take ac­tion yet, the agency of­fi­cials said. It’s un­clear wheth­er Sprint and the FCC are still en­gaged in set­tle­ment talks.

Neil Grace, a spokes­man for FCC Chair­man Tom Wheel­er, de­clined to com­ment. A Sprint spokes­man said the com­pany doesn’t “com­ment on ru­mors and spec­u­la­tion.”

The Con­sumer Fin­an­cial Pro­tec­tion Bur­eau is also mulling ac­tion against Sprint over the is­sue, ac­cord­ing to the FCC of­fi­cials. A CFPB spokes­man de­clined to com­ment.

In re­cent years, mem­bers of Con­gress and fed­er­al reg­u­lat­ors have been try­ing to com­bat “cram­ming” — the prac­tice of pla­cing un­wanted charges on phone bills. The Fed­er­al Trade Com­mis­sion has brought nu­mer­ous cases against third-party scam­mers, but reg­u­lat­ors are only just be­gin­ning to go after the phone com­pan­ies them­selves.

Earli­er this year, the Sen­ate Com­merce Com­mit­tee re­leased a re­port find­ing that third-party charges on cell-phone bills have be­come a bil­lion-dol­lar in­dustry, much of it fraud­u­lent. The ma­jor car­ri­ers all keep a por­tion of the rev­en­ue for them­selves, ac­cord­ing to the Sen­ate re­port.

Those third-party ser­vices are of­ten “premi­um” text mes­sages like horo­scopes or celebrity gos­sip. Con­sumers of­ten don’t real­ize they’re be­ing billed for the spam be­cause the charges are bur­ied on their monthly bills un­der mis­lead­ing titles, ac­cord­ing to the Sen­ate in­vest­ig­a­tion.

What We're Following See More »
FCC Tightens Internet Privacy Standards
11 hours ago

Along party lines, the Federal Communications Commission on Thursday voted to tighten privacy standards for Internet service providers. "The regulations will require providers to receive explicit customer consent before using an individual’s web browsing or app usage history for marketing purposes. The broadband industry fought to keep that obligation out of the rules."

Clinton Up 9 in USA Today Poll; Up 3 According to Fox
16 hours ago

A new USA Today/Suffolk University poll finds Clinton leads Trump by 9 points nationwide, 47% to 38%. A Fox News national poll has Clinton up just three points, 44% to 41% over Trump.

Cruz: Eight Justices Could Be an Ongoing Situation
18 hours ago

Sen. Ted Cruz (R-TX) said that "there was “precedent” for a Supreme Court with fewer than nine justices—appearing to suggest that the blockade on nominee Merrick Garland could last past the election." Speaking to reporters in Colorado, Cruz said: "I would note, just recently, that Justice Breyer observed that the vacancy is not impacting the ability of the court to do its job. That’s a debate that we are going to have.”

DNC Sues RNC Over Trump’s Rigged Vote Comments
21 hours ago

The Democratic National Committee sued the Republican National Committee in U.S. District Court in New Jersey for aiding GOP nominee Donald Trump as he argues that the presidential election is "rigged." The DNC claims "that Trump's argument is designed to suppress the vote in minority communities."

Clinton Foundation Staffers Steered Biz to Bill
1 days ago

"Two chief fundraisers for the Clinton Foundation pressed corporate donors to steer business opportunities to former President Bill Clinton as well, according to a hacked memo published Wednesday by WikiLeaks. The November 2011 memo from Douglas Band, at the time a top aide to Mr. Clinton, outlines extensive fundraising efforts that Mr. Band and a partner deployed on behalf of the Clinton Foundation and how that work sometimes translated into large speaking fees and other paid work for Mr. Clinton."


Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.