Apparently, that is exactly what has been going on with many phone companies. There have been complaints about “cramming” from mobile service providers since the summer of 2008, and recently the Federal Communications Commission (FCC) has started to focus investigation in that direction.
As part of these investigations, the FCC issued a $105 million fine to Sprint Sprint. That fine does not include the possible payouts and credits Sprint may need to issue after the Consumer Financial Protection Bureau (CFPB) gets done with their lawsuit.
The CFPB is going after the third largest mobile service provider with the first lawsuit of its kind. The reason they are suing Sprint is because the company received a forty percent cut of the total subscription cost. The lawsuit covers from 2004 to 2013 and anyone who may have been overcharged or improperly charged is included.
So what is “cramming” exactly and how is Sprint involved?
Cramming is the act of charging customers for services they did not agree to, or trick them into agreeing to those fees through other means. In many cases, a third party who accepted payment through Sprint’s billing system was the biggest culprit. But Sprint allowed the charges, and did not explain to their customers what specifically they were for.
The FCC alleges Sprint has swindled milliosn from their customers this way, and unfortunately they are not alone. AT&T was hit with payouts totaling $105 million in October and T-Mobile received an FCC fine earlier this. Cramming is big business for these companies. When AT&T stopped their cramming practices due to lawsuits and fines that were settled out of court, they lost twenty percent of their yearly income.
Sprint hasn’t really addressed the issue of cramming, but they disagree with the way the CFPB is characterizing their business practices in the lawsuit. They do not deny the allegation of cramming, just that if customers feel they have been improperly charged during those years, they need to contact customer service to resolve the issue. This may be a little difficult as Sprint changed its system in 2009, and consumers may not have access to all their bills way back to 2004.
The lesson to be learned here is if you have trouble understanding your mobile bill, or something doesn’t look right, do not sit on your hands. There are a number of steps you can take to reduce your risk of paying for services you never authorized. Call to get to the bottom of the issue before paying your bill.
(Photo courtesy of Mike Mozart)