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.

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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.

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